LORD ABBETT AFFILIATED FUND INC, 485APOS, 1998-12-30

LORD ABBETT AFFILIATED FUND INC
485APOS, 1998-12-30

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1933 Act File No. 2-10638
1940 Act File No. 811-5

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|

Pre-Effective Amendment No. |_|

Post-Effective Amendment No. 77 |X|

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT |X|
OF 1940

Amendment No. 77 |X|

LORD ABBETT AFFILIATED FUND, INC.
---------------------------------
Exact Name of Registrant as Specified in Charter

767 FIFTH AVENUE, NEW YORK, N. Y. 10153-0203
--------------------------------------------
Address of Principal Executive Office

Registrant's Telephone Number (212) 848-1800
--------------------------------------------

Paul A. Hilstad, Vice President & Secretary
767 FIFTH AVENUE, NEW YORK, N. Y. 10153
---------------------------------------
Name and Address of Agent for Service

It is proposed that this filing will become effective (check appropriate box)

|_| immediately upon filing pursuant to paragraph (b)

|_| on (date) pursuant to paragraph (b)

|X| 60 days after filing pursuant to paragraph (a) (1)

|_| on (date) pursuant to paragraph (a) (1)

|_| 75 days after filing pursuant to paragraph (a) (2)

|_| on (date) pursuant to paragraph (a) (2) of rule 485

If appropriate, check the following box:

|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>

Prospectus March 1, 1999

Lord Abbett Funds

Affiliated Fund
Small-Cap Fund
Growth Opportunities Fund
International Fund
High Yield Fund

First Draft

[Logo]Lord, Abbett & Co.

Investment Management

A Tradition of Performance Through Disciplined Investing

As with all mutual funds, the Securities and Exchange
Commission doesn't guarantee that the information in this
prospectus is accurate or complete, and it has not judged
these funds for investment merit. Stating otherwise is a
crime.
<PAGE>

Table of Contents

The Funds Page

Affiliated Fund
Goal/Approach
Main Risks
Past Performance
Expenses
Financial Highlights
Management
Recent Performance
What every investor Small-Cap Fund
should know about the funds Goal/Approach
Main Risks
Past Performance
Expenses
Financial Highlights
Management
Recent Performance
Growth Opportunities Fund
Goal/Approach
Main Risks
Past Performance
Expenses
Financial Highlights
Management
Recent Performance
International Fund
Goal/Approach
Main Risks
Past Performance
Expenses
Financial Highlights
Management
Recent Performance
High Yield Fund
Goal/Approach
Main Risks
Past Performance
Expenses
Management
Your Investment
Purchases
Information for managing Opening Your Account
your fund account Distributions and Taxes
Services for Fund Investors
For More Information
How to learn more about the Glossary of Shaded Terms
funds and other Lord Abbett Back Cover
funds

2
<PAGE>

GOAL / APPROACH -- Affiliated Fund

The fund's investment objective is long-term growth of capital and income
without excessive fluctuations in market value. Typically, in choosing stocks,
we look for companies using a three-step process.

o Quantitative research is performed on a universe of large, seasoned
U.S. and multinational companies to identify those who stocks we
think represent the best bargains.

o Fundamental research is conducted to assess a company's operating
environment, resources and strategic plans and to determine its
prospects for exceeding the earnings expectations reflected in its
stock price.

o Business cycle analysis is used to assess the of economic
interest-rate sensitivity our portfolio. This analysis helps us
assess how adding or deleting stocks changes our portfolio's
overall sensitivity to economic activity and interest rates.

We believe that investors purchase and redeem our shares to meet long-term
financial objectives rather than to try to take advantage of short-term price
fluctuations. If so, their needs are best served by an investment seeking
capital appreciation with less fluctuations in market value than the Standard &
Poor's Composite Index of 500 stocks ("S&P 500(R)"). For this reason, we try to
keep our assets invested in securities which are selling at reasonable prices
and, therefore, we are willing to forego some opportunities for gains when, in
our judgment, they are too risky.

We typically sell a stock when we think it is no longer a bargain, appears less
likely to benefit from the current market and economic environment, shows
deteriorating fundamentals or falls short of our expectations.

Information on recent market conditions and the fund's strategies can be
found under "Recent Performance" and in the current annual/semi-annual
report (see back cover). The report also has the fund's holdings
information.

WE, THE FUND OR THE AFFILIATED FUND refers to Lord Abbett Affiliated Fund, Inc.
which operates through its officers under the supervision of its Board of
Directors with the advice of Lord, Abbett & Co. ("Lord Abbett"), its investment
manager.

LARGE COMPANIES are established companies that are considered "known
quantities." Large companies often have the resources to weather economic
shifts, though they can be slower to innovate than small companies.

SEASONED COMPANIES are usually established companies whose securities have
gained a reputation for quality with the investing public and enjoy liquidity in
the market.

BARGAIN STOCKS are stocks of companies that appear underpriced according to
certain proprietary financial measurements of their intrinsic worth or business
prospects.

SMALL-COMPANY STOCKS. Stocks of smaller companies which often are new and less
established, with a tendency to be faster-growing but more volatile than large
company stocks.

GROWTH STOCKS. Stocks that exhibit faster-than-average gains in earnings and are
expected to continue profit growth at a high-level. They tend to be more
volatile than slower-growing stocks.

3
<PAGE>

MAIN RISKS

While stocks have historically been a leading choice of long-term investors,
they fluctuate in price. The value of your investment in the fund will go up and
down, which means that you could lose money.

Our performance may sometimes be lower or higher than that of other types of
funds (such as those emphasizing small-company stocks or growth stocks).
Different types of stocks tend to shift in and out of favor depending on market
and economic conditions. While there is the risk that investment may never reach
what we think is its full value, or may go down in value, emphasis on large,
seasoned company bargain stocks could potentially limit our downside risk
because bargain stocks in theory are already underpriced. In addition, large,
seasoned company stocks tend to be less volatile than small-company stocks. In
the long run, we may produce more modest gains than riskier stock funds as a
trade-off for this potentially lower risk.

While typically fully invested, we may take a temporary defensive position by
investing some of our assets in short-term debt securities. This could reduce
the benefit from any upswing in the market.

See the terms: Borrowing, Changing Investment Profile, Foreign Securities,
Portfolio Securities Lending, Diversification, Repurchase Agreements, High
Yield Debt Securities, and Illiquid Securities under "For More
Information" to learn about our other investment strategies and their
risks.

YEAR 2000 ISSUES. The fund could be adversely affected if the computers used by
it and its service providers do not properly process and calculate date-related
information from and after January 1, 2000. While year 2000-related computer
problems could have a negative effect on each fund, Lord Abbett is working to
avoid such problems and has assurances from the fund's service providers that
they are taking similar steps. However, because the problem is unprecedented,
and efforts to identify and fix any problems are ongoing, we don't know whether
these efforts will be successful. Accordingly, the fund may be adversely
affected.

PAST PERFORMANCE - Affiliated Fund

The chart and table below show how the fund's returns fluctuate.(i) Total return
without sales charge showing changes from calendar year to calendar year (%).
Assumes reinvestment of dividends and distributions.

[Insert bar chart here]

Best Quarter: Q 0% Worst Quarter: Q 0%
================================================================================
Comparison of class A shares' average annual total return to that of the
S&P 500(R)(ii). Assumes reinvestment of dividends and distributions. All
periods end on December 31, 1998.

1 Year 5 Years 10 Years Inception(iii)

Class A 0.0% 0.0% 0.0% 0.0%
S&P 500(R)(iii) 0.0% 0.0% 0.0% 0.0%

- ----------
(i) Because Class Y shares are new, the bar chart and table show returns for
Class A shares. Returns for Class Y shares will be somewhat higher, because
Class Y has lower expenses.

(ii) Performance for the unmanaged S&P 500(R) does not reflect transaction costs
or management fees.

(iii) The date of inception of Class A is 5/14/34.

4
<PAGE>

EXPENSES --

As an investor, you pay certain fees and expenses in connection with the
fund, which are described in the fee table below. Shareholder transaction
fees are paid from your account. Annual fund operating expenses are paid
out of fund assets, so they reduce the fund's share price.

Fee table

Shareholder Transaction Fees
Maximum Sales Charge on Purchases
None
Deferred Sales Charge none
Annual Fund Operating Expenses (as a % of average net assets)
Management Fees (See "Management") 0.32%
12b-1 Fees none
Other Expenses (See "Management") 0.08%
Total Operating Expenses 0.40%

Expense example

This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment, 5% total return each year and no changes in expenses.

1 Year 3 Years 5 Years 10 Years

$41 $128 $224 $507

This example is for comparison and is not a representation of the Affiliated
Fund's actual expenses or returns, either past or present.

MANAGEMENT FEE: The fee paid to Lord Abbett for the fund's investment
management.

12B-1 FEES: 12b-1 refers to the federal securities regulation that permits funds
to pay distribution fees for activities that are primarily intended to result in
the sale of fund shares and service fees for shareholder account service and
maintenance.

OTHER EXPENSES: Fees paid by the fund for miscellaneous items such as transfer
agency, custody, accounting, legal and share registration fees.

5
<PAGE>

FINANCIAL HIGHLIGHTS - Affiliated Fund

This table describes the fund's performance for the fiscal period indicated.
"Total return" shows how much your investment in the fund would have increased
(or decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been audited by Deloitte & Touche LLP, the
fund's independent auditors, in conjunction with their audits of the fund's
inancial statatements. Financial statements for the fiscal year ended October
31, 1998 and the independent auditors' report thereon.

Class Y Share Operating Period from March 27, 1998(a)
to October 31, 1998

Performance:
Net asset value, beginning of period $15.44
Income from investment operations
Net investment income 0.15
Net realized and unrealized
gain (loss) on investments (.89)
Total from investment operations (.74)
Distributions
Dividends from net investment income (.13)
Net asset value, end of period $14.57
Total Return(b)(c) (4.77)%
Ratios to Average Net Assets:
Expenses(C) 0.24%
Net investment income 1.03%

Supplemental Data for all Classes:

Net Assets, end of period (000) $8,520,603

Portfolio turnover rate 56.49%

(a) Commencement of operations of class.
(b) Total return is not annualized and assumes the reinvestment of all
distributions.
(c) Not annualized.

See Notes to Financial Statements.

MANAGEMENT - Affiliated Fund

The fund's investment adviser is Lord, Abbett & Co., 767 Fifth Avenue, New York,
New York 10153-0203. Founded in 1929, Lord Abbett manages one of the nation's
oldest mutual fund complexes, with more than $25 billion in 36 mutual fund
portfolios and other advisory accounts. For more information about the services
Lord Abbett provides to the fund, see the Statement of Additional Information.

The fund pays Lord Abbett a monthly fee based on the average daily net assets
for each month. For the fiscal year ended October 31, 1998, the fee paid to Lord
Abbett was at an annual rate of .32 of 1%. In addition, the fund pays all
expenses not expressly assumed by Lord Abbett.

W. Thomas Hudson, Jr., Partner of Lord Abbett and Executive Vice President and
Portfolio Manager of the Affiliated Fund, is primarily responsible for the
day-to-day management of the fund. Mr. Hudson has been with Lord Abbett since
1982 and has over 32 years of investment experience. Mr. Hudson is assisted by,
and may delegate management duties to, other Lord Abbett employees.

6
<PAGE>

RECENT PERFORMANCE - Affiliated Fund

During the past fiscal year, the stock market and the fund enjoyed returns above
historical averages due to an environment of solid economic growth, low
inflation and strong corporate profit gains. Throughout most of the period, the
portfolio has been evenly diversified, but with a moderate overweighting in
financial stocks. Furthermore, we have shifted our focus within this group of
stocks towards insurance companies, which are benefiting from industry-wide
consolidation and cost-cutting efforts.

Immediately below is a comparison of a $10,000 investment in class A shares to
the same investment in the S&P 500(R), assuming reinvestment of all dividends
and distributions.

ABOUT THE FUND. The fund is a mutual fund: a pooled investment that is
professionally managed and gives you the opportunity to participate in
securities markets. It strives to reach its stated goal, although as with all
funds, it cannot guarantee results and its past performance is not a prediction
of future results.

An investment in a fund is not a bank deposit. It is not FDIC-insured or
government-endorsed. It is not a complete investment program. You could lose
money in this fund, but you also have the potential to make money.

GOAL/APPROACH -- Small-Cap Fund

The fund seeks long-term capital appreciation. In choosing stocks, we look for
companies using the following process:

o Quantitative research is performed on a universe of companies with market
capitalizations ranging between $100 million and $750 million. Valuation
criteria include price/earnings, price/book value, price/cash flow and
price/sales ratios.

o Fundamental research is conducted to assess the dynamics of each company
with its industry and within the economy, by evaluating the company's
business strategies in assessing management's ability to execute the
strategies and by evaluating the adequacy of a company's financial
management.

Usually, at least 65% of the fund's total assets will be invested in common
stocks issued by smaller, less well-known companies (with market capitalizations
of less than $1 billion) selected using fundamental investment analysis. The
fund may invest up to 35% of its total assets in the securities of larger
companies. Companies in which the fund is likely to invest may have more limited
product lines, markets or financial resources and may lack management depth or
experience as compared with companies with larger market capitalizations.

Information on recent market conditions and the fund's strategies can be
found under "Recent Performance" and in the current annual/semiannual
report (see back cover). The report also has the fund's holdings
information.

WE, THE FUND OR THE SMALL-CAP FUND refers to Lord Abbett Small-Cap Fund, which
operates through its officers under the supervision of its Board of Trustees
with the advice of Lord, Abbett & Co. ("Lord Abbett"), its investment manager.

SMALL-COMPANY STOCKS. Stocks of smaller companies which often are new and less
established, with a tendency to be faster-growing but more volatile than large
company stocks.

7
<PAGE>

MAIN RISKS

Small-company stocks offer significant appreciation potential. Generally, small-
companies carry more risk than larger companies. Generally, small companies rely
on limited product lines and markets, financial resources, or other factors, and
this may make them more susceptible to setbacks or economic downturns.
Small-company stocks tend to be more volatile in price, have fewer shares
outstanding and trade less frequently than large company stocks. Therefore,
small company stocks may be subject to wider price fluctuations. Many
small-company stocks are traded over-the-counter and are not be traded in the
volume typical of stocks listed on a national securities exchange.

While typically fully invested, we may take a temporary defensive position by
investing some of our assets in short-term debt securities. This could reduce
the benefit from any upswing in the market.

See the terms: Borrowing, Chaniging Investment Profile, Diversification,
Foreign Securities, Portfolio Securities Lending, High Yield Debt
Securities, Repurchase Agreements, When-Issued or Delayed Delivery
Transactions Short-Term Fixed Income Securities and Illiquid Securities
and under "For More Information" to learn about our other investment
strategies and their risks.

8
<PAGE>

PAST PERFORMANCE - Small-Cap Fund

[Insert bar chart here]

Best Quarter: Q 0% Worst Quarter: Q 0%
================================================================================

Comparison of class A shares' average annual total return to that of the
Russell 2000(R) Index. Assumes reinvestment of dividends and
distributions. All periods end on December 31, 1998.

1 Year Inception(ii)

Class A 0.0% 0.0%
Russell 2000(R)Index(iii) 0.0% 0.0%

- ----------
(i) Because Class Y shares are new, the bar chart and table show returns for
Class A shares. Returns for Class Y shares will be somewhat higher, because
Class Y has lower expenses.

(ii) The date of inception of Class A is 12/13/95.

(iii) Performance for the unmanaged Russell 2000(R) Index does not reflect
transaction costs or management fees.

EXPENSES - Small-Cap Fund

As an investor, you pay certain fees and expenses in connection with the
fund, which are described in the fee table below. Shareholder transaction
fees are paid from account. Annual fund operating expenses are paid fund's
fund assets, so they reduce the fund's share price.

Fee table

Shareholder Transaction Fees
Maximum Sales Charge on Purchases
none
Deferred Sales Charge none
Annual Fund Operating Expenses(1) (as a % of average net assets)
Management Fees (See "Management") 0.75%
12b-1 Fees none
Other Expenses (See "Management") 0.11%
Total Operating Expenses 0.86%

Expense example

This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment, 5% total return each year and no changes in expenses.

1 Year 3 Years 5 Years 10 Years

$88 $274 $477 $1063

This example is for comparison and is not a representation of the
Small-Cap Fund's actual expenses or returns, either past or present.

(1) The annual perating expenses shown in the summary have been restated
from the fund's fiscal year-end amount to reflect current fees

MANAGEMENT FEE: The fee paid to Lord Abbett for the your investment out of
management.

OTHER EXPENSES: Fees paid by the fund for miscellaneous items such as transfer
agency, custody, accounting, legal and share registration fees.

9
<PAGE>

FINANCIAL HIGHLIGHTS - Small-Cap Fund

Class Y Share Operating Period from December 30, 1997
to November 30, 1998 (unaudited)

Performance:
Net asset value, beginning of period $16.34
Income from investment operations
Net investment income 0.000(c)
Net realized and unrealized
gain (loss) on investments 0.00
Total from investment operations 0.00
Distributions
Dividends from net investment income (0.000)
Distributions from net realized gain --
Net asset value, end of period $0.00
Total Return(d) 0.00%
Ratios to Average Net Assets:
Expenses(d) 0.00%
Net investment income 0.00%(c)

Supplemental Data for all Classes: Small-Cap Fund

Net Assets, end of period (000) $000,000

Portfolio turnover rate 00.00%

(a) Commencement of operations of class.
(b) Total return is not annualized and assumes the reinvestment of all
distributions.
(c) Amount less than 0.01%
(d) Not annualized.

See Notes to Financial Statements.

MANAGEMENT - Small-Cap Fund

The fund pays Lord Abbett a monthly fee based on the average daily net assets
for each month. For the fiscal year ended November 30, 1998, the fee paid to
Lord Abbett was at an annual rate of .75 of 1%. In addition, the fund pays all
expenses not expressly assumed by Lord Abbett.

Robert P. Fetch, Partner of Lord Abbett and Executive Vice President and
Portfolio Manager of the Small-Cap Fund, is primarily responsible for the
day-to-day management of the Small Cap Fund since its inception. Mr. Fetch is
assisted by Gregory M. Macosko, and may delegate management

10
<PAGE>

duties to other Lord Abbett employees. Before joining Lord Abbett, Mr. Fetch was
a Managing Director of Prudential Investment Advisors.

RECENT PERFORMANCE

[to come from Small-Cap Annual report]

11
<PAGE>

GOAL/APPROACH -- Growth Opportunities Fund

The Growth Opportunities Fund seeks capital appreciation. Normally, we invest
primarily in equity securities of mid-sized companies. The fund uses a growth
style of investing. This means that we favor companies that show the potential
for stronger than expected earnings or growth. Under normal circumstances, at
least 65% of our total assets will consist of investments made in growth
companies, as determined at the time of purchase.

In making investments, we look for companies using the following process:

o Quantitative research is performed on a universe of mid-sized companies to
identify those with superior growth possibilities.

o Fundamental research is performed to identify companies likely to produce
superior returns over a thirty-six month time frame, by analyzing the
dynamics in each company with its industry and within the economy.

Before July 15, 1998, the fund used a value style of investing. This meant that
companies were selected without regard to current earnings under a process that
sought to identify and invest in undervalued securities.

WE, THE FUND OR THE GROWTH OPPORTUNITIES FUND refers to Lord Abbett Growth
Opportunities Fund, which operates through its officers under the supervision of
its Board of Directors with the advice of Lord, Abbett & Co. ("Lord Abbett"),
its investment manager.

GROWTH STOCKS. Stocks that exhibit faster-than-average gains in earnings and are
expected to continue profit growth at high-level, but also tend to be more
volatile than slower-growing stocks.

MID-SIZED COMPANIES. Companies whose stocks have an aggregate market value
between $1 billion and $6 billion.

MAIN RISKS

The value of your investment will fluctuate in response to stock market
movements. In addition, growth stocks tend to be more volatile than
slower-growing stocks. This means that the fund could be more volatile than the
stock market as a whole.

While typically fully invested, we may take a temporary defensive position by
investing some of our assets in short-term debt securities. This could reduce
the benefit from any upswing in the market.

See the terms: Foreign Securities, Portfolio Securities Lending, Selling
Covered Call Options, High Yield Debt Securities, and Illiquid Securities
and under "For More Information" to learn about our other investment
strategies and their risks.

PAST PERFORMANCE -- Growth Opportunities Fund

The chart and table below show how the fund's returns fluctuate.(i) Total return
without sales charge showing changes from calendar year to

- ----------
(i) Because Class Y shares are new, the bar chart and table show returns for
Class A shares. Returns for Class Y shares will be

12
<PAGE>

calendar year (%) Assumes reinvestment of dividends and distributions.

[Insert bar chart here]

Best Quarter: Q 0% Worst Quarter: Q 0%
================================================================================

Comparison of class A shares' average annual total return to that of the
Russell Mid-Cap Growth Index(R). Assumes reinvestment of dividends and
distributions. All periods end on December 31, 1998.

1 Year Inception(ii)

Class A 0.0% 0.0%
Russell Mid-Cap Growth Index(R)(iii) 0.0% 0.0%

somewhat higher, because Class Y has lower expenses.

- ----------
(ii) The date of inception of Class A is 8/1/95.

(iii) Performance 1 for the unmanaged Russell Mid-Cap Growth Index(R) does not
reflect transaction costs or management fees.

MANAGEMENT -- Growth Opportunities Fund

The fund pays Lord Abbett a monthly fee based on the average daily net assets
for each month. For the fiscal year ended October 31, 1998, the fee paid to Lord
Abbett was at an annual rate of .00 of 1%. In addition, the fund pays all
expenses not expressly assumed by Lord Abbett.

Stephen J. McGruder, Partner of Lord Abbett and Executive Vice President and
Senior Portfolio Manager of the Growth Opportunities Fund is primarily
responsible for the day-today management of the fund. He joined Lord Abbett in
1995 and has over 29 years of investment experience. Before joining Lord Abbett,
Mr. McGruder served since October of 1988 as Vice President of Wafra Investment
Advisory Group, a private investment company. Mr. McGruder is assisted by, and
may delegate management duties to, other Lord Abbett employees.

13
<PAGE>

EXPENSES - Growth Opportunities Fund

Fee table

Shareholder Transaction Fees
Maximum Sales Charge on Purchases
none
Deferred Sales Charge none
Annual Fund Operating Expenses (as a % of average net assets)
Management Fees (See "Management") 0.90
12b-1 Fees none
Other Expenses (See "Management") 0.28%
Total Operating Expenses 1.18%

EXPENSE EXAMPLE

This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment, 5% total return each year and no changes in expenses.

1 Year 3 Years 5 Years 10 Years

$120 $374 $649 $1,434

This example is for comparison and is not a representation of the Growth
Opportunities fund's actual expenses or returns, either past or present.

(1) The annual operating expenses shown in the summary have been restated
from the Fund's fiscal year-end amount to reflect current fees.

MANAGEMENT FEE: The fee paid to Lord Abbett for the fund's investment
management.

12B-1 FEES: 12b-1 refers to the federal securities regulation that permits funds
to pay distribution fees for any activity which is primarily intended to result
in the sale of fund shares and service fees for shareholder account service and
maintenance.

Other expenses: Fees paid by the fund for miscellaneous items such as transfer
agency, custody, accounting, legal and share registration fees.

RECENT PERFORMANCE

[to come from annual report]

14
<PAGE>

GOAL/APPROACH - International Fund

The fund's investment objective is long-term capital appreciation. The
production of any current income is incidental to this objective. The fund also
may invest in stocks which do not produce any income.

The fund invests in stocks of companies which are in both developed and
developing countries. Normally, at least 80% of the assets of the fund are
invested in stocks of companies in at least three different countries outside
the United States.

Although the fund intends to invest primarily in stocks of small companies with
market capitalization of less than $1 billion listed on stock exchanges, it may
also invest in stocks of companies traded in over-the-counter markets, as well
as stocks of large and middle-sized companies.

OVER-THE-COUNTER STOCKS are usually those of smaller companies that do not meet
listing requirement of major exchanges. Transactions are conducted by telephone
and computer network rather than on the floor of an exchange.

MIDDLE-SIZED COMPANIES usually have market capitalizations of roughly $500
million to $5 billion, but not less than $50 million.

SMALL COMPANY STOCKS are stocks of smaller companies which often are new and
less established, with a tendency to be faster-growing but more volatile and
less liquid than large company stocks.

DEVELOPING COUNTRIES may have higher and more rapidly fluctuating inflation
rates, a higher demand for capital investment, a higher dependence on export
markets for their major industries, and a greater need to develop basic economic
infrastructures than more developed countries. Also, it may be more difficult to
obtain a judgment in a court outside the United States.

MAIN RISKS

The fund entails more investment risk than funds that invest in the U.S. stock
market. A substantial amount of the assets of the fund will be denominated or
traded in foreign currencies. A change in the value of any foreign currency
relative to the U.S. dollar results in changes in the U.S. dollar value of the
fund's assets denominated or traded in that currency. The fund's performance is
measured in U.S. dollars, the base currency of the fund.

Also, securities in which the fund invests are usually not subject to the same
degree of regulation as domestic securities and may be more volatile

and less liquid than those of major U.S. markets.

Lack of liquidity affects the fund's ability to trade in large blocks of
securities and obtain the best price. There is often less information available
on publicly-traded companies, banks and governments than in the U.S. , and a
lack of uniform accounting standards and practices among countries impairs a
direct comparison for stocks and bonds. Other concerns include costs of currency
hedging and conversion, political and social instability, expropriation, higher
transaction costs and longer settlement practices. Foreign securities held by
the fund sometimes are traded on days that the fund does not value its portfolio
securities, such as Saturdays and customary U.S. business holidays, and,
accordingly, the fund's net asset value may be significantly affected on days
when shareholders do not have access to the fund.

The fund may temporarily reduce its stock holdings for defensive purposes in
response to adverse market conditions and invest in domestic, Eurodollar and
foreign short-term money market instruments. This could reduce the benefit from
any upswing in the market.

See the terms: Borrowing, Changing Investment Profile, Closed-End
Investment Companies, Depository Receipts, Diversification, Illiquid
Securities, Investment Funds, Portfolio Securities Lending, Repurchase
Agreements, and When Issued or Delayed Delivery Transactions under "For
More Information" to learn about our other investment strategies and their
risks.

are taking similar steps. However, because the problem is unprecedented, and
efforts to identify and fix any problems are ongoing, we don't know whether
these efforts will be successful. Accordingly, the fund may be adversely
affected.

On January 1, 1999, the eleven member states of the European Union converted to
a common currency, known as the "Euro". Each fund could be adversely affected if
the computers used by it and its service providers do not properly process and
calculate euro-related information from and after January 1, 1999. While
euro-related computer problems could have a negative effect on each fund, Lord
Abbett is working to avoid such problems and has assurances from each fund's
service providers that they are taking similar steps. However, because the
problem is unprecedented, we don't know whether these efforts will be successful
and, accordingly, each fund may be adversely affected.

PAST PERFORMANCE - International Fund

[Insert bar chart here]

Best Quarter: Q 0% Worst Quarter: Q 0%
================================================================================

Comparison of class A shares' average annual total return to that of the
Morgan Stanley European, Australasia and Far East Index(R)("EAFE
Index(R)"). Assumes reinvestment of dividends and distributions. All
periods end on December 31, 1998.

Year Inception(ii)

Class A 0.0% 0.0%
EAFE Index(R)(iii) 0.0% 0.0%

- ----------
(i) Because Class Y shares are new, the bar chart and table show returns for
Class A shares. Returns for Class Y shares will be somewhat higher, because
Class Y has lower expenses.

(ii) The date of inception of Class A is 12/13/96.

(iii) Performance for the unmanaged EAFE Index(R)does not reflect transaction
costs or management fees.

EXPENSES -- International Fund

MANAGEMENT FEE: The fee paid

16
<PAGE>

to Lord Abbett for the fund's investment management.

OTHER EXPENSES: Fees paid by the fund for miscellaneous items such as transfer
agency, custody, accounting, legal and share registration fees.

As an investor, you pay certain fees and expenses in connection with the fund,
which are described in the fee table below. Shareholder transaction fees are
paid from your account. Annual fund operating expenses are paid out of fund
assets, so they reduce the fund's share price.

Fee table

Shareholder Transaction Fees
Maximum Sales Charge on Purchases
None
Deferred Sales Charge none
Annual Fund Operating Expenses(1) (as a % of average net assets)
Management Fees (See "Management") 0.75%
12b-1 Fees none
Other Expenses (See "Management") 0.31%
Total Operating Expenses 1.06%

EXPENSE EXAMPLE

This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment, 5% total return each year and no changes in expenses.

1 Year 3 Years 5 years 10 years

$108 $337 $585 $1297

This example is for comparison and is not a representation of the
International fund's actual expenses or returns, either past or present.

(1) The annual operating expenses shown in the summary have been restated
from the Fund's fiscal year-end amount to reflect current fees.

17
<PAGE>

FINANCIAL HIGHLIGHTS -- International Fund

Class Y Share Operating Period from December 30, 1997(a)
to October 31, 1998

Performance:
Net asset value, beginning of period $11.28
Income from investment operations and
Net investment income 0.15
Net realized and unrealized
gain (loss) on investments 0.98
Total from investment operations 1.13

Net asset value, end of period $12.41
Total Return(b)(c) 10.02%
Ratios to Average Net Assets:
Expenses 0.84%
Net investment income 1.11%

Supplemental Data for all classes International Fund

Supplemental Data For All Classes: 1998 12/30/96 to 10/31/97
Net Assets, end of period (000) $153,033 $37,334
Portfolio turnover rate 20.52% 29.72%

(a) Commencement of operations of class.
(b) Total return is not annualized and assumes the reinvestment of all
distributions.
(c) Not annualized

See Notes to Financial Statements.

MANAGEMENT - International Fund

The fund pays Lord Abbett a monthly fee based on the average daily net assets
for each month. For the fiscal year ended October 31, 1998, the fee paid to Lord
Abbett was at an annual rate of .75 of 1%. In addition, the fund pays all
expenses not expressly assumed by Lord Abbett.

Lord Abbett has entered into an agreement with Fuji-Lord Abbett International
Ltd. (the "Sub-Adviser"), under which the Sub-Adviser provides Lord Abbett with
advice regarding the International Fund's assets. Lord Abbett pays the
Sub-Adviser a monthly fee equal to 1/2 of Lord Abbett's fee.

Christopher J. Taylor, Managing Director of the Sub-Adviser and Portfolio
Manager of International Fund, is primarily responsible for fee day-to-day
management of the fund. Mr. Taylor has been with the Sub-Adviser and its

18
<PAGE>

predecessor since 1987 and has over fifteen years of investment experience.

RECENT PERFORMANCE

The fund's investment strategy consisted of holding a relatively concentrated
portfolio, comprised of a restricted number of markets and stocks on
industry-leading companies. The stocks were bought at low valuation levels, and
in line with our investment philosophy, which means that we used the recent
period of market weakness to steadily add to existing positions.

In addition, the fund was not invested in the emerging and Far Eastern markets,
but was instead concentrated primarily in Europe and Canada. This in addition to
the funds superior stock selection, contributed to the last fiscal year's high
performance. Through this period, portfolio turnover remained low. We used new
purchase monies to add to our existing holdings during this period. As a result,
there was very little actual change to our list. Throughout this period,
portfolio turnover remained low.

19
<PAGE>

GOAL/APPROACH -- High Yield Fund

The Fund seeks high current income and the opportunity for capital appreciation
to produce a high total return. Normally, we invest in lower-rated debt
securities, sometimes called "junk bonds,"which entail greater risks than
investments in higher-rated debt securities.

We believe that a high total return (current income and capital appreciation)
may be derived from an actively managed, diversified security portfolio. Under
normal circumstances, we invest at least 65% of our total assets in lower-rated
debt securities, some of which are convertible into common stock or have
warrants to purchase common stock.

We seek unusual values, particularly in lower-rated debt securities, some of
which are convertible into common stocks or have warrants to purchase common
stocks. Higher yield on debt securities can occur during periods of inflation
when the demand for borrowed funds is high. Also, buying lower-rated bonds when
the credit risk is above average but, we think, likely to decrease, may generate
higher yields.

HIGH YIELD DEBT SECURITIES. The fund may invest all of its assets in high yield
debt securities. High yield debt securities or "junk bonds" are rated BB/Ba or
lower and typically pay a higher yield than investment grade debt securities.
These bonds have a higher risk of default than investment grade bonds and their
prices can be much more volatile.

FOREIGN SECURITIES. Foreign securities are securities primarily traded in
countries outside the United States. These securities are not subject to the
same degree of regulation and may be more volatile and less liquid than
securities traded in major U.S. markets. Other considerations include political
and social instability, expropriations, higher transaction costs, currency
fluctuations, nondeductable withholding taxes and different settlement
practices.

MAIN RISKS

The lower-rated bonds in which the fund invests involve risks that interest and
principal payments may not be made. Some issuers may default as to principal
and/or interest payments after we purchase their securities. Through portfolio
diversification, good credit analysis and attention to current developments and
trends in interest rates and economic conditions, we attempt to reduce
investment risk, but losses may occur. In addition, the value of your investment
will change as interest rates fluctuate. When interest rates decline, share
value may rise. When interest rates rise, share value may decline. The fund uses
investment practices, such as investments in foreign securities, illiquid
securities and other securities, that could adversely affect performance.

While typically fully invested, we may take a temporary defensive position by
investing some of our assets in short-term debt securities. This could reduce
the benefit from any upswing in the market.

See the terms: Changing Investment Profile, Diversification, Foreign
Securities, Portfolio Securities Lending, Repurchase Agreements, Illiquid
Securities and under "For More Information" to learn about our other
investment strategies and their risks.

PAST PERFORMANCE -- High Yield Fund

Because the High Yield Fund began operations on December __, 1998, there

20
<PAGE>

is no bar chart or table of performance.

MANAGEMENT -- High Yield Fund

The fund's investment adviser is Lord, Abbett & Co., 767 Fifth Avenue, New York,
New York 10153-0203. Founded in 1929, Lord Abbett manages one of the nation's
oldest mutual to fund complexes, with more than $25 billion in 36 mutual fund
portfolios and other advisory accounts. For more information about the services
Lord Abbett provides to the fund, see the Statement of Additional Information.

The fund pays Lord Abbett a monthly fee based on the average daily net assets
for each month. For the fiscal year ended November 30, 1998, the fee paid to
Lord Abbett was at an annual rate of .00 of 1%. In addition, the fund pays all
expenses not expressly assumed by Lord Abbett.

Christopher J. Towle, Partner of Lord Abbett and Executive Vice President and
Co-Portfolio Manager of the Fund, is primarily responsible for the day-to-day
management of the Fund. Mr. Towle has been with Lord Abbett since 1988 and has
over 17 years of investment experience. Mr. Towle is assisted by, and may
delegate management duties to, other Lord Abbett employees.

Michael Goldstein serves as Co-Portfolio Manager of the Fund. Mr. Goldstein has
been with Lord Abbett since April 1997. Before joining Lord Abbett, Mr.
Goldstein was a bond trader for Credit Suisse BEA Associates from August 1992
through April 1997.

ABOUT THE FUND. The fund is a mutual fund: a pooled investment that is
professionally managed and gives you the opportunity participate in securities
markets. It strives to reach its stated goal, although as with all funds, it
cannot guarantee results and its past performance is not a prediction of future
results.

EXPENSES -- High Yield Fund

Fee table

Shareholder Transaction Fees
Maximum Sales Charge on Purchases
none
Deferred Sales Charge none
Annual Fund Operating Expenses(1) (as a % of average net assets)
Management Fees (See "Management") 0.60%
12b-1 Fees none
Other Expenses (See "Management") 0.25%
Total Operating Expenses 0.85%

Expense example

This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment, 5% total return each year and no changes in expenses.

1 Year 3 Years 5 Years 10 Years

$87 $271 $471 $1,051

This example is for comparison and is not a representation of the High
Yield fund's actual expenses or returns, either past or present.

(1) The annual operating expenses shown in the summary have been restated
from the Fund's fiscal year-end amount to reflect current fees.

MANAGEMENT FEE: The fee paid to Lord Abbett for the fund's investment
management.

OTHER EXPENSES: Fees paid by the fund for miscellaneous items such as transfer
agency, custody, accounting, legal and share registration fees.

21
<PAGE>

PURCHASES

CLASS Y SHARES. Class Y shares are purchased at net asset value with no sales
charge of any kind. The net asset value of our shares is calculated every
business day as of the close of the New York Stock Exchange.

WHO MAY INVEST? Eligible purchasers of Class Y shares include: (i) certain
authorized brokers, dealers, registered investment advisers or other financial
institutions who have entered into an agreement with Lord Abbett Distributor in
accordance with certain standards approved by Lord Abbett Distributor, providing
specifically for the use of our Class Y shares in particular investment products
made available for a fee to clients of such brokers, dealers, registered
investment advisers or other financial institutions ("mutual fund wrap-fee
programs"), (ii) the trustee or custodian under any deferred compensation or
pension or profit-sharing plan or payroll deduction IRA established for the
benefit of the employees of any company with an account(s) in excess of $10
million managed by Lord Abbett or its sub-advisors on a private-advisory-account
basis, and (iii) institutional investors, including retirement plans, companies,
foundations, trusts, endowments and other entities where the total amount of
potential investable assets exceeds $20 million that were not introduced to Lord
Abbett by persons associated with a broker or dealer primarily involved in the
retail security business. Additional payments may be made by Lord Abbett out of
its own resources with respect to certain of these sales.

HOW MUCH MUST YOU INVEST? You may buy our shares through any independent
securities dealer having a sales agreement with Lord Abbett Distributor, our
exclusive selling agent. Place your order with your investment dealer or send
the funds to the fund you selected (P.O. Box 419100, Kansas City, Missouri
64141). The minimum initial investment is $1 million except for mutual fund
wrap-fee programs which have no minimum. This offering may be suspended, changed
or withdrawn by Lord Abbett Distributor which reserves the right to reject any
order.

BUYING SHARES THROUGH YOUR DEALER. Orders for shares received by a Fund prior to
the close of the NYSE, or received by dealers prior to such close and received
by Lord Abbett Distributor prior to the close of its business day, will be
confirmed at net asset value effective at such NYSE close. Orders received by
dealers after the NYSE closes and received by Lord Abbett Distributor in proper
form prior to the close of its next business day are executed at the net asset
value effective as of the close of the NYSE on that next business day. The
dealer is responsible for the timely transmission of orders to Lord Abbett
Distributor. A business day is a day on which the NYSE is open for trading.

BUYING SHARES BY WIRE. To open an account, call 1-800 -821-5129 Ext. 34028,
Institutional Trade Dept., to set up your account and to arrange a wire
transaction. Wire to: United Missouri Bank of Kansas City, N.A., Routing number
- - 101000695, bank account number: 9878002611, FBO: (account name) and (your Lord
Abbett account number). Specify the complete name of the fund of your choice,
note Class Y shares and include your new account number and your name. To add to
an existing account,

NET ASSET VALUE. The net asset value ("NAV") is calculated each business day at
the close of trading on the New York Stock Exchange ("NYSE"). Each fund is open
on those business days when the NYSE is open. Purchases and sales of fund shares
are made at the NAV next determined after your order is accepted. Portfolio
securities for which quotations are not available are valued at fair value under
procedures approved by the Boards of Directors/Trustees.

LORD ABBETT DISTRIBUTOR LLC. Lord Abbett Distributor is each fund's exclusive
selling agent. Lord Abbett Distributor is obligated to use its best efforts to
find purchasers for the shares of the fund, and to make reasonable efforts to
sell fund shares so long as, in Lord Abbett Distributor's judgment, a
substantial distribution can be obtained.

IMPORTANT INFORMATION. If you do not provide a correct taxpayer identification
number or make certain required certifications, you may be subject to a $50
penalty under the Internal Revenue Code and we may be required to withhold 31%
of any redemption proceeds and of any dividend or distribution on your account.

ELIGIBLE GUARANTOR. Any broker or bank that is a member of the medallion stamp
program. Most major securities firms and banks are members of this program. A
notary public is not an eligible guarantor.

GUARANTEED SIGNATURE. An acceptable form of guarantee would be as follows:

In the case of the estate -

Robert A. Doe

Executor of the
Estate of

John W. Doe

22
<PAGE>

WIRE TO: United Missouri Bank of Kansas City, N.A., routing number - 101000695,
bank account number: 9878002611, FBO: (account name) and (your Lord Abbett
account number). Specify the complete name of the fund of your choice, note
Class Y shares and include your account number and your name.

REDEMPTIONS

BY BROKER. Call your investment professional for directions on how to redeem
your shares.

BY TELEPHONE. To obtain the proceeds ($50,000 or less) of an expedited
redemption to the name and address in which your account is registered, you or
your representative can call a fund at 1-800-821-5129.

BY MAIL. Submit a written redemption request indicating the name(s) in which the
account is registered, the fund's name, the class of shares, your account
number, and the dollar value or number of shares you wish to sell.

INCLUDE ALL NECESSARY SIGNATURES. If the signer has any Legal Capacity, the
signature and capacity must be guaranteed by an Eligible Guarantor. Certain
other legal documentation may be required. For more information regarding proper
documentation call 1-800-821-5129.

We will verify that the shares being redeemed or purchased at least 15 days
earlier. Your account balance must be sufficient to cover the amount being
redeemed or your redemption order will not be processed.

Normally a check will be mailed to the name and address in which the account is
registered (or otherwise according to your instruction) within three business
days after receipt of your redemption request.

[Date]

[INSERT GRAPHIC]

In the case of the corporation -

ABC Corporation

Mary B. Doe

By Mary B. Doe,
President

[Date]

[INSERT GRAPHIC]

DIVIDENDS AND TAXES

Each fund pays its shareholders dividends from its net investment income, and
distributes any net capital gains that it has realized. Affiliated Fund expects
to pay income dividends to shareholders in February, May, August and November
and capital gain distributions once a year. Small-Cap Fund, Growth Opportunities
Fund, and International Fund expect to pay income dividends and capital gains
distributions once a year. High Yield Fund expects to pay income dividends and
capital gain distributions once a year. Your distributions will be reinvested in
the fund unless you instruct the fund otherwise.

Fund dividends and distributions are taxable to most investors (unless your
investment is in an IRA or other tax-advantaged account). The tax status of any
distribution is the same regardless of how long you have been in the fund and
whether you reinvest your distributions or take them in cash. In general,
distributions are taxable as follows:

================================================================================
U.S. federal imcome tax on distributions
- --------------------------------------------------------------------------------
Type of distribution Tax rate for taxpayer Tax rate for taxpayer subject
subject to 15% bracket to 28% bracket or above

Taxes on transactions. Except in tax-advantaged accounts, any sale or exchange
of fund shares may be a taxable event.

The table at left can provide a "rule of thumb" guide for your potential U.S.
federal income tax liability when selling or exchanging fund shares. The second
row, "Short-term capital gains," applies to fund shares sold within 12 months of
purchase. The third row, "Long-term capital gains," applies to shares held for
more than 12 months.

Starting January 1, 2001, sales of securities held for more than five years will
be taxed at special lower rates.

23
<PAGE>

- --------------------------------------------------------------------------------
Income dividends 15% Ordinary income rate
- --------------------------------------------------------------------------------
Short-term capital gains 15% Ordinary income rate
- --------------------------------------------------------------------------------
Long-term capital gains 10% 20%
- --------------------------------------------------------------------------------

The tax status of the distributions for each calendar year will be explained in
your annual tax statement from the fund.

Because everyone's tax situation is unique, you should always consult a tax
professional about federal, state and local tax consequences

SERVICES FOR FUND INVESTORS

We offer the following shareholder services:

TELEPHONE EXCHANGE PRIVILEGE: Class Y shares may be exchanged without a service
charge for Class Y shares of any eligible Lord Abbett-sponsored fund.

ACCOUNT STATEMENTS. Generally, every Lord Abbett investor automatically receives
quarterly account statements.

Householding. Generally, shareholders with the same last name and address will
receive a single copy of a prospectus and an annual or semi-annual report,
unless additional reports are specifically requested in writing to the fund.

ACCOUNT CHANGES. For any changes you need to make to your account, consult your
investment professional or call the fund at 800-821-5129.

TELEPHONE TRANSACTIONS. For your protection, telephone transaction requests are
recorded. We will take measures to verify the identity of the caller, such as
asking for your name, account number, social security or taxpayer identification
number and other relevant information. The fund will not be liable for following
instructions communicated by telephone that it reasonably believes to be
genuine.

Transactions by telephone may be difficult to implement in times of drastic
economic or market conditions. The exchanges by telephone should not be used to
take advantage of short-term swings in the market. Each fund reserves the right
to limit or terminate this or any other telephone transaction privilege for any
shareholder making frequent exchanges or otherwise abusing the telephone
transaction privilege and may revoke the privilege for all shareholders upon 60
days' prior written notice. You have the this privilege unless you refuse it in
writing.

24
<PAGE>

For More Information

GLOSSARY OF SHADED TERMS

BORROWING. Each fund may borrow from banks. If a fund borrows money, its share
price may be subject to greater fluctuation until the borrowing is paid off.
each underlying fund may borrow only for temporary or emergency purposes, and
not in an amount exceeding 33 1/3% of its total assets.

CHANGING INVESTMENT PROFILE. Each fund may, but is not required to, use various
strategies to change its investment profile so as to adjust its exposure to
changing security prices, interest rates, currency exchange rates, commodity
prices and other factors. These strategies may involve derivative transactions
such as buying and selling options and futures contracts, entering into currency
exchange contracts or swap agreements and purchasing indexed securities and
rights and warrants. We can use these transactions to change the risk and return
characteristics of each fund's portfolio. If we judge market conditions
incorrectly or use a strategy that does not correlate well with the fund's
investments, it could result in a loss, even if we intended to lessen risk or
enhance returns. These transactions may involve a small investment of cash
compared to the magnitude of the risk assumed and could produce disproportionate
gains or losses. Also, these strategies could result a loss if the counterparty
to a transaction does not perform as promised.

CLOSED-END INVESTMENT COMPANIES. Each fund may invest in shares of closed-end
investment companies if it pays a fee or commission no greater than the
customary broker's commission. Shares of closed-end investment companies
sometimes trade at a discount or premium to their net asset value. Also, there
may be duplication of fees if a fund and the closed-end investment company both
charge a management fee.

DEPOSITORY RECEIPTS. The International Fund may invest in Depository Receipts,
which aree securities, typically issued by a . financial institution (a
"depository"), that evidence ownership interests in a security or a pool of
securities issued by a foreign issuer (the "underlying issuer") and deposited
with the depository. Generally, Depository Receipts in registered form are
designed for use in the U.S. securities market and Depository Receipts in bearer
form are designed for use in securities markets outside the United States. The
fund may invest in sponsored and unsponsored Depository Receipts. For purposes
of the International Fund's investment policies, investments in Depository
Receipts will be deemed to be investments in the underlying securities.

DIVERSIFICATION. Each underlying fund is a diversified fund, which means that
with respect to 3/4 of its total assets, it will not purchase a security if, as
a result, more than 5% of the fund's total assets would be invested in
securities of a single issuer or the fund would hold more than 10% of the
outstanding voting securities of the issuer.

25
<PAGE>

ELIGIBLE FUND. An Eligible Fund is any Lord Abbett-sponsored fund except for (1)
certain tax-free, single-state funds where the exchanging shareholder is a
resident of a state in which such series is not offered for sale; (2) Lord
Abbett Equity Fund; (3) Lord Abbett Series Fund; and (4) Lord Abbett U.S.
Government Securities Money Market Fund ("GSMMF") (except for holdings in GSMMF
which are attributable to any shares exchanged from the Lord Abbett family of
funds). An Eligible Fund also is any Authorized Institution's affiliated money
market fund satisfying Lord Abbett Distributor as to certain omnibus account and
other criteria.

HIGH-YIELD DEBT SECURITIES. High yield debt securities or "junk bonds" are rated
BB/Ba or lower and typically pay a higher yield than investment grade debt
securities. These bonds have a higher risk of default than investment grade
bonds and their prices can be much more volatile. Affiliated Fund and Small-Cap
Fund will not invest more than 5% of its assets meansured at the time of
investment in high yield debt securities. High Yield Fund may invest all of its
assets in high yield debt securities.

ILLIQUID SECURITIES. These securities include those that are not traded on the
open market or that trade irregularly or in very low volume. They may be
difficult or impossible to sell at the time and price the fund would like. Each
underlying fund may invest up to 15% of its assets in illiquid securities.

INVESTMENT FUNDS. Some emerging countries have laws and regulations that
currently preclude direct foreign investment in the securities of their
companies. However, indirect foreign investment in the securities of such
countries is permitted through investment funds which have been specifically
authorized. The International Fund may invest (normally not more than 5% of the
fund's total assets) in these investment funds and subject to other restrictions
discussed in the Statement of Additional Information. If the fund invests in
such investment funds, the fund's shareholders will bear not only their
proportionate share of the expenses of the fund (including operating expenses
and the fees of Lord Abbett), but also will indirectly bear similar expenses of
the underlying investment funds.

LEGAL CAPACITY. This term refers to the authority of an individual to act on
behalf of an entity or other person(s). For example, if a redemption request
were to be made on behalf of the estate of a deceased shareholder, John W. Doe,
by a person (Robert A. Doe) who has the legal capacity to act for the estate of
the deceased shareholder because he is the executor of the estate, then the
request must be executed as follows: Robert A. Doe, Executor of the Estate of
John W. Doe. That signature using that capacity must be guaranteed by an
Eligible Guarantor.

To give another example, if a redemption request were to be made on behalf of
the ABC Corporation by a person (Mary B. Doe) the has the legal capacity to act
on the half of the Corporation, because she is the president of the corporation,
the request must be executed as follows: ABC

26
<PAGE>

CORPORATION BY MARY B. DOE, PRESIDENT. That signature using that capacity must
be guaranteed by an Eligible Guarantor.

MUTUAL FUND ADVISORY PROGRAM. Certain unaffiliated authorized brokers, dealers,
registered investment advisers or other financial institutions who have entered
into an agreement with Lord Abbett Distributor in accordance with certain
standards approved by Lord Abbett Distributor, providing specifically for the
use of fund shares (and sometimes providing for acceptance of orders for such
shares on Lord Abbett Distributor's behalf) in particular investment products
made available for a fee to clients of such brokers, dealers, registered
investment advisers and other financial institutions.

PORTFOLIO SECURITIES LENDING. Each fund may lend to securities to broker-dealers
and financial institutions, as a means of earning income. This practice could
result of a loss or delay in recovering a fund's securities, if the borrower
defaults. Each fund will limit its securities loans to 33 1/3% of its total
assets.

PURCHASER. The term "purchaser" includes: (i) an individual, (ii) an individual
and his or her spouse and children under the age of 21 and (iii) a trustee or
other fiduciary purchasing shares for a single trust estate or single fiduciary
account (including a pension, profit-sharing, or other employee benefit trust
qualified under Section 401 of the Internal Revenue Code - more than one
qualified employee benefit trust of a single employer, including its
consolidated subsidiaries, may be considered a single trust, as may qualified
plans of multiple employers registered in the name of a single bank trustee as
one account), although more than one beneficiary is involved.

REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at one
price from a broker-dealer or financial institution and simultaneously agrees to
sell the same security back to the same party at a higher price in the future.
If the other party to the agreement defaults or becomes insolvent, the fund
could lose money.

SHORT-TERM FIXED-INCOME SECURITIES. Each fund is authorized to invest
temporarily in certain short-term fixed income securities. These securities are
used to invest uncommitted cash balances, to maintain liquidity to meet
shareholder redemptions, or to take out of temporary defensive position against
market declines. This could have the effect of reducing the benefit from any
upswing in the market.

U.S. GOVERNMENT SECURITIES. These are obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.

WHEN-ISSUED OR DELAYED DELIVERY TRANSACTIONS: Small-Cap Fund, Growth
Opportunities Fund, and International Fund may purchase or sell securities with
payment and delivery taking place as much as a month or more later. A fund would
do this in effort to buy or sell the securities at an advantageous price and
yield. The securities involved are subject to market fluctuation and no interest
accrues to the purchaser during the period between purchase and settlement. At
the time of delivery of the securities, their market value may be less than the
purchase price. Also, if a fund commits a significant amount of assets to
when-issued or delayed delivery

27
<PAGE>

transactions, it may increase the volatility of the fund's net asset value.

28
<PAGE>

FOR MORE INFORMATION
- --------------------------------------------------------------------------------
More information on these funds is available free upon request, including the
following:

ANNUAL/SEMIANNUAL REPORT

Describes the fund, lists portfolio holdings and contains a letter from the
fund's manager.

STATEMENT OF ADDITIONAL INFORMATION

Provides more details about the fund and its policies. A current Statement of
Additional Information is on file with the Securities and Exchange Commission
("SEC") and is incorporated by reference (is legally considered part of this
prospectus).

Lord Abbett Affiliated Fund, Inc.
Lord Abbett Small-Cap Fund
Lord Abbett Growth Opportunities Fund
Lord Abbett International Fund
Lord Abbett High Yield Fund
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203

- ----------------------------
SEC file numbers: 811-3, 811-06650, 811-07538, and 811-07988

To obtain information:

By telephone. Call the fund at 1-800-426-1130

By mail. Write to:

The Lord Abbett Family of Funds
767 Fifth Avenue
New York, NY 10153-0203

Via the Internet. Text only versions of fund documents can be viewed online or
downloaded from:

Lord, Abbett & Co.

http://www.lordabbett.com

SEC

http://www.sec.gov

You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, D.C. (phone 1-800-SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, D.C.
20549-6009.

- --------------------------------------------------------------------------------

29
<PAGE>

Lord, Abbett & Co.
Statement of Additional Information March 1, 1999

Lord Abbett Affiliated Fund
Lord Abbett Small-Cap Fund
Lord Abbett Growth Opportunities Fund
Lord Abbett International Fund
Lord Abbett High Yield Fund

- --------------------------------------------------------------------------------
This Statement of Additional Information is not a Prospectus. A Prospectus for
Class Y shares of the Funds identified below may be obtained from your
securities dealer or from Lord Abbett Distributor LLC ("Lord Abbett
Distributor") at the General Motors Building, 767 Fifth Avenue, New York, New
York 10153-0203. This Statement relates to, and should be read in conjunction
with, the Prospectus dated March 1, 1999. This Statement of Additional
Information, relating to Lord Abbett Affiliated Fund, Inc. ("Affiliated Fund");
Lord Abbett Small-Cap Fund ("Small-Cap Fund") and Lord Abbett Growth
Opportunities Fund ("Growth Opportunities Fund"), both of which are series of
Lord Abbett Research Fund, Inc.; Lord Abbett International Fund ("International
Fund"), which is a series of Lord Abbett Securities Trust; and Lord Abbett High
Yield Fund ("High Yield Fund"), which is a series of Lord Abbett Investment
Trust, (each individually "we" or the "Fund", collectively (the "Funds"), may be
obtained from your securities dealer or from Lord Abbett Distributor LLC ("Lord
Abbett Distributor") at The General Motors Building, 767 Fifth Avenue, New York,
New York 10153-0203. This Statement of Additional Information relates to, and
should be read in conjunction with, the Prospectus dated March 1, 1999 (the
"Prospectus").

Our Boards of Directors/Trustees have authority to create and classify shares in
separate series, without further action by shareholders. To date, the Boards of
Directors/Trustees have authorized four classes of shares for Small-Cap Fund,
Growth Opportunities Fund, International Fund and High Yield Fund (Class A, B, C
and Y), and five classes of shares for Affiliated Fund (Class A, B, C, Y and P).
The Board of a Fund will allocate a Fund's shares among its classes from time to
time. All shares of a Fund have equal noncumulative voting rights and equal
rights with respect to dividends, assets and liquidation, except for certain
class-specific expenses. They are fully paid and nonassessable when issued and
have no preemptive or conversion rights. Although no present plans exist to do
so, further classes or series may be added to one or more of the Funds in the
future. The Investment Company Act of 1940, as amended (the "Act"), requires
that where more than one series exists for a Fund, each series must be preferred
over all other series in respect of assets specifically allocated to such
series.

Rule 18f-2 under the Act provides that any matter required to be submitted, by
the provisions of the Act or applicable state law or otherwise, to the holders
of the outstanding voting securities of an investment company such as a Fund
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each class or series affected
by such matter. Rule 18f-2 further provides that a class or series shall be
deemed to be affected by a matter unless the interests of each class or series
in the matter are substantially identical or the matter does not affect any
interest of such class or series. However, the Rule exempts the selection of
independent public accountants, the approval of principal distribution contracts
and the election of directors from the separate voting requirements of the Rule.

Shareholder inquiries should be made by writing directly to your Fund or by
calling 800-821-5129. In addition, you can make inquiries through Lord Abbett
Distributor.

TABLE OF CONTENTS PAGE
1. Investment Policies 2
2. Directors (Trustees) and Officers 11
3. Investment Advisory and Other Services 16
4. Portfolio Transactions 18
5. Purchases, Redemptions
and Shareholder Services 19
6. Taxes 20
7. Past Performance 21
8. Information About The Funds 22
9. Financial Statements 23

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Investment Policies

Each Fund will not change its investment objective mentioned in the Prospectus
or the following fundamental investment restrictions without shareholder
approval. If a Fund determines that its objective can best be achieved by a
change in any non--fundamental investment policy, strategy or restriction, it
may make such change without shareholder approval by disclosing it in the
Prospectus or Statement of Additional Information.

Fundamental Investment Restrictions. Each Fund may not: (1) borrow money, except
that (i) each Fund may borrow from banks (as defined in the Investment Company
Act of 1940, as amended (the "Act")) in amounts up to 33 1/3% of its total
assets (including the amount borrowed), (ii) each Fund may borrow up to an
additional 5% of its total assets for temporary purposes, (iii) each Fund may
obtain such short-term credit as may be necessary for the clearance of purchases
and sales of portfolio securities and (iv) each Fund may purchase securities on
margin to the extent permitted by applicable law; (2) pledge its assets (other
than to secure borrowings, or to the extent permitted by the Fund's investment
policies as permitted by applicable law); (3) engage in the underwriting of
securities, except pursuant to a merger or acquisition or to the extent that, in
connection with the disposition of its portfolio securities, it may be deemed to
be an underwriter under federal securities laws; (4) make loans to other
persons, except that the acquisition of bonds, debentures or other corporate
debt securities and investment in government obligations, commercial paper,
pass-through instruments, certificates of deposit, bankers acceptances,
repurchase agreements or any similar instruments shall not be subject to this
limitation, and except further that each Fund may lend its portfolio securities,
provided that the lending of portfolio securities may be made only in accordance
with applicable law; (5) buy or sell real estate (except that each Fund may
invest in securities directly or indirectly secured by real estate or interests
therein or issued by companies which invest in real estate or interests therein)
or commodities or commodity contracts (except to the extent each Fund may do so
in accordance with applicable law and without registering as a commodity pool
operator under the Commodity Exchange Act as, for example, with futures
contracts); (6) with respect to 75% of the gross assets of each Fund, buy
securities of one issuer representing more than (i) 5% of each Fund's gross
assets, except securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities or (ii) 10% of the voting securities of such
issuer; (7) invest more than 25% of its assets, taken at market value, in the
securities of issuers in any particular industry (excluding securities of the
U.S. Government, its agencies and instrumentalities); or (8) issue senior
securities to the extent such issuance would violate applicable law.

With respect to the restrictions mentioned herein, compliance therewith will not
be affected by changes in the market value of portfolio securities but will be
determined at the time of purchase or sale of such securities.

Non-Fundamental Investment Restrictions. In addition to the investment
restrictions above which cannot be changed without shareholder approval, each
Fund also is subject to the following non-fundamental investment policies which
may be changed by the Boards of Directors (Trustees) without shareholder
approval. Each Fund may not: (1) borrow in excess of 33 1/3% of its total assets
(including the amount borrowed), and then only as a temporary measure for
extraordinary or emergency purposes; (2) make short sales of securities or
maintain a short position except to the extent permitted by applicable law; (3)
invest knowingly more than 15% of its net assets (at the time of investment) in
illiquid securities, except for securities qualifying for resale under Rule 144A
of the Securities Act of 1933, deemed to be liquid by the Boards of Directors
(Trustees); (4) invest in the securities of other investment companies as
defined under the Act, (in the case of the International Fund, as long as the
Fund is an underlying fund in a fund-of-funds structure) except as permitted by
applicable law; (5) invest in securities of issuers which, with their
predecessors, have a record of less than three years of continuous operation, if
more than 5% of each Fund's total assets would be invested in such securities
(this restriction shall not apply to mortgaged-backed securities, asset-backed
securities or obligations issued or guaranteed by the U. S. Government, its
agencies or instrumentalities); (6) hold securities of any issuer if more than
1/2 of 1% of the securities of such issuer are owned beneficially by one or more
of each Fund's officers or directors (trustees) or by one or more partners or
members of the Fund's underwriter or investment adviser if these owners in the
aggregate own beneficially more than 5% of the securities of such issuer; (7)
invest in warrants if, at the time of the acquisition, its investment in
warrants, valued at the lower of cost or market, would exceed 5% of each Fund's
total assets (included within such limitation, but not to exceed 2% of each
Fund's total assets, are warrants which are not listed on the New York or
American Stock Exchange or a major foreign exchange); (8) invest in real estate
limited partnership interests or interests in oil, gas or other mineral leases,
or exploration or other development programs, except that each Fund may invest
in securities issued by companies that engage in oil, gas or other mineral
exploration or other

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development activities; (9) write, purchase or sell puts, calls, straddles,
spreads or combinations thereof, except to the extent permitted in a Fund's
prospectus and statement of additional information, as they may be amended from
time to time; (10) buy from or sell to any of a Fund's officers, directors
(trustees), employees, or its investment adviser or any of a Fund's officers,
directors (trustees), partners or employees, any securities other than shares of
a Fund; (11) with respect to Affiliated Fund, pledge, mortgage or hypothecate
its assets; however, this provision does not apply to the grant of escrow
receipts or the entry into other similar escrow arrangements arising out of the
writing of covered call options; and (12) with respect to High Yield Fund,
invest more than 10% of the market value of its gross assets at the time of
investment in debt securities which are in default as to interest or principal.

For the year ended October 31, 1998, Affiliated Fund's portfolio turnover rate
was 00.00% versus 46.41% for the prior year. For the year ended November 30,
1998, the Small-Cap Fund's portfolio turnover rate was ____% versus 45.24% for
the prior year. For the year ended October 31, 1998, the International Fund's
portfolio turnover rate was ____% versus 29.72% for the period December 13, 1996
(commencement of operations) to October 31, 1997. For the year ended November
30, 1998, the Growth Opportunities Fund's turnover rate was ____% versus ____%
for the prior year.

With respect to the Affiliated Fund, it has no current intention to do so, but
may invest in financial futures & options on financial futures.

INVESTMENT TECHNIQUES

Lending Portfolio Securities (Affiliated Fund, Growth Opportunities Fund,
International Fund, Small-Cap Fund) The Funds may lend portfolio securities to
registered broker-dealers. These loans may not exceed 30% of total assets. The
Funds' loans of securities will be collateralized by cash or marketable
securities issued or guaranteed by the U.S. Government or its agencies ("U.S.
Government Securities") or other permissible means. The cash or instruments
collateralizing the loans of securities will be maintained at all times in an
amount at least equal to the current market value of the loaned securities. From
time to time, the Funds may allow to the borrower and/or a third party that is
not affiliated with the Funds and is acting as a "placing broker" a part of the
interest received with respect to the investment of collateral received for
securities loaned. No fee will be paid to affiliated persons of the Funds.

By lending portfolio securities, the Funds can increase their income by
continuing to receive interest on the loaned securities as well as by either
investing the cash collateral in permissible investments, such as U.S.
Government Securities, or obtaining yield in the form of interest paid by the
borrower when such U.S. Government Securities are used as collateral. The Funds
will comply with the following conditions whenever they loans securities: (i)
the Funds must receive at least 100% collateral from the borrower; (ii) the
borrower must increase the collateral whenever the market value of the
securities loaned rises above the level of the collateral; (iii) the Funds must
be able to terminate the loan at any time; (iv) the Funds must receive
reasonable compensation with respect to the loan, as well as any dividends,
interest or other distributions on the loaned securities; (v) the Funds may pay
only reasonable fees in connection with the loan and (vi) voting rights on the
loaned securities may pass to the borrower except that, if a material event
adversely affecting the investment in the loaned securities occurs, the Funds'
Board must terminate the loan and regain the right to vote the securities.

Rule 144A Securities (Affiliated Fund) We may invest in securities qualifying
for resale to "qualified institutional buyers" under SEC Rule 144A that are
determined by the Board, or by Lord Abbett pursuant to the Board's delegation,
to be liquid securities. The Board will review quarterly the liquidity of the
investments the Fund makes in such securities. Investments by the Fund in Rule
144A securities initially determined to be liquid could have the effect of
diminishing the level of the Fund's liquidity during periods of decreased market
interest in such securities among qualified institutional buyers.

Other Investment Policies (Affiliated Fund) As stated in the Prospectus, the
Fund may write covered call options which are traded on a national securities
exchange with respect to securities in our portfolio in an attempt to increase
income and to provide greater flexibility in the disposition of portfolio
securities. A "call option" is a contract sold for a price (the "premium")
giving its holder the right to buy a specific number of shares of stock at a
specific price prior to a specified date. A "covered call option" is a call
option issued on securities already owned by the writer of the call

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<PAGE>

option for delivery to the holder upon the exercise of the option. During the
period of the option, the Fund will forgo the opportunity to profit from any
increase in the market price of the underlying security above the exercise price
of the option (to the extent that the increase exceeds our net premium). We also
may enter into "closing purchase transactions" in order to terminate the
obligation to deliver the underlying security (this may result in a short-term
gain or loss). A closing purchase transaction is the purchase of a call option
(at a cost which may be more or less than the premium received for writing the
original call option) on the same security, with the same exercise price and
call period as the option previously written. If the Fund is unable to enter
into a closing purchase transaction, it may be required to hold a security that
it might otherwise have sold to protect against depreciation. The Fund does not
intend to write covered call options with respect to securities with an
aggregate market value of more than 10% of its gross assets at the time an
option is written. This percentage limitation will not be increased without
prior disclosure in the Fund's current Prospectus.

Repurchase Agreements (International Fund) The Fund may enter into repurchase
agreements with respect to a security. A repurchase agreement is a transaction
by which the Fund acquires a security and simultaneously commits to resell that
security to the seller (a bank or securities dealer) at an agreed upon price on
an agreed upon date. The resale price reflects the purchase price plus an agreed
upon market rate of interest which is unrelated to the coupon rate or date of
maturity of the purchased security. In this type of transaction, the securities
purchased by each Fund have a total value in excess of the value of the
repurchase agreement. The Fund requires at all times that the repurchase
agreement be collateralized by cash or U.S. Government securities having a value
equal to, or in excess of, the value of the repurchase agreement. Such
agreements permit the Fund to keep all of its assets at work while retaining
flexibility in pursuit of investments of a longer term nature.

The use of repurchase agreements involves certain risks. For example, if the
seller of the agreement defaults on its obligation to repurchase the underlying
securities at a time when the value of these securities has declined, the Fund
may incur a loss upon disposition of them. If the seller of the agreement
becomes insolvent and subject to liquidation or reorganization under the
Bankruptcy Code or other laws, a bankruptcy court may determine that the
underlying securities are collateral not within the control of each Fund and are
therefore subject to sale by the trustee in bankruptcy. Even though the
repurchase agreements may have maturities of seven days or less, they may lack
liquidity, especially if the issuer encounters financial difficulties. While
Fund management acknowledges these risks, it is expected that they can be
controlled through stringent selection criteria and careful monitoring
procedures. Fund management intends to limit repurchase agreements to
transactions with dealers and financial institutions believed by Fund management
to present minimal credit risks. Fund management will monitor creditworthiness
of the repurchase agreement sellers on an ongoing basis.

The Fund will enter into repurchase agreements only with those primary reporting
dealers that report to the Federal Reserve Bank of New York and with the 100
largest United States commercial banks and the underlying securities purchased
under the agreements will consist only of those securities in which the Fund
otherwise may invest.

Warrants (International Fund) Pursuant to Texas regulations, the Fund will not
invest more than 5% of its assets in warrants and not more than 2% of such value
in warrants not listed on the New York or American Stock Exchanges, except when
they form a unit with other securities. As a matter of operating policy, we will
not invest more than 5% of our net assets in rights.

Covered Call Options (International Fund) As stated in the Prospectus, the Fund
may write covered call options which are traded on a national securities
exchange with respect to securities in its portfolio in an attempt to increase
its income and to provide greater flexibility in the disposition of its
portfolio securities. A "call option" is a contract sold for a price (the
"premium") giving its holder the right to buy a specific number of shares of
stock at a specific price prior to a specified date. A "covered call option" is
a call option issued on securities already owned by the writer of the call
option for delivery to the holder upon the exercise of the option. During the
period of the option, the Fund forgoes the opportunity to profit from any
increase in the market price of the underlying security above the exercise price
of the option (to the extent that the increase exceeds its net premium). The
Fund may enter into "closing purchase transactions" in order to terminate its
obligation to deliver the underlying security (this may result in a short-term
gain or loss). A closing purchase transaction is the purchase of a call option
(at a cost which may be more or less than the premium received for writing the
original call option) on the same security, with the same exercise price and
call period

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<PAGE>

as the option previously written. If the Fund is unable to enter into a closing
purchase transaction, it may be required to hold a security that it might
otherwise have sold to protect against depreciation. The Fund intends to write
covered call options with respect to securities with an aggregate market value
of more than 5% of its gross assets at the time an option is written. This
percentage limitation will not be increased without prior disclosure in the
current Prospectus.

The Fund's custodian will segregate cash or liquid high-grade debt securities in
an amount not less than that required by Securities and Exchange Commission
("SEC") Release 10666 with respect to the Fund's assets committed to written
covered call options. If the value of the segregated securities declines,
additional cash or debt securities will be added on a daily basis (i.e.,
marked-to-market) so that the segregated amount will not be less than the amount
of the Fund's commitments with respect to such written options.

Financial Futures Contracts (International Fund) The Fund may enter into
contracts for the future delivery of a financial instrument, such as a security
or the cash value of a securities index. This investment technique is designed
primarily to hedge (i.e., protect) against anticipated future changes in
interest rates or market conditions which otherwise might adversely affect the
value of securities which we hold or intend to purchase. A "sale" of a futures
contract means the undertaking of a contractual obligation to deliver the
securities or the cash value of an index called for by the contract at a
specified price during a specified delivery period. A "purchase" of a futures
contract means the undertaking of a contractual obligation to acquire the
securities or cash value of an index at a specified price during a specified
delivery period. At the time of delivery pursuant to the contract, adjustments
are made to recognize differences in value arising from the delivery of
securities which differ from those specified in the contract. In some cases,
securities called for by a futures contract may not have been issued at the time
the contract was written. The Fund will not enter into any futures contracts or
options on futures contracts if the aggregate of the market value of the
securities covered by its outstanding futures contracts and securities covered
by futures contracts subject to the outstanding options written by it would
exceed 50% of its total assets.

Although some financial futures contracts by their terms call for the actual
delivery or acquisition of securities, in most cases, a party will close out the
contractual commitment before delivery without having to make or take delivery
of the security by purchasing (or selling, as the case may be) on a commodities
exchange an identical futures contract calling for delivery in the same month.
Such a transaction, if effected through a member of an exchange, cancels the
obligation to make or take delivery of the securities. All transactions in the
futures market are made, offset or fulfilled through a clearing house associated
with the exchange on which the contracts are traded. The International Fund will
incur brokerage fees when it purchases or sells contracts and will be required
to maintain margin deposits. At the time it enters into a futures contract, it
is required to deposit with its custodian, on behalf of the broker, a specified
amount of cash or eligible securities called "initial margin." The initial
margin required for a futures contract is set by the exchange on which the
contract is traded. Subsequent payments, called "variation margin," to and from
the broker are made on a daily basis as the market price of the futures contract
fluctuates. The costs incurred in connection with futures transactions could
reduce the Fund's return. Futures contracts entail risks. If the investment
adviser's judgment about the general direction of interest rates or markets is
wrong, the overall performance may be poorer than if no such contracts had been
entered into.

There may be an imperfect correlation between movements in prices of futures
contracts and portfolio securities being hedged. The degree of difference in
price movements between futures contracts and the securities (or securities
indices) being hedged depends upon such things as variations in demand for
futures contracts and securities underlying the contracts and differences
between the liquidity of the markets for such contracts and the securities
underlying them. In addition, the market prices of futures contracts may be
affected by certain factors not directly related to the underlying securities.
At any given time, the availability of futures contracts, and hence their
prices, are influenced by credit conditions and margin requirements. Due to the
possibility of price distortions in the futures market and because of the
imperfect correlation between movements in the prices of securities and
movements in the prices of futures contracts, a correct forecast of market
trends by the investment adviser may not result in a successful hedging
transaction.

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Options on Financial Futures Contracts (International Fund) The Fund may
purchase and write call and put options on financial futures contracts. An
option on a futures contract gives the purchaser the right, in return for the
premium paid, to assume a position in a futures contract at a specified exercise
price at any time during the period of the option. Upon exercise, the writer of
the option delivers the futures contract to the holder at the exercise price.
The Fund would be required to deposit with our custodian initial margin and
maintenance margin with respect to put and call options on futures contracts
written by us. Options on futures contracts involve risks similar to the risks
relating to transactions in financial futures contracts described above.
Generally speaking, a given dollar amount used to purchase an option on a
financial futures contract can hedge a much greater value of underlying
securities than if that amount were used to directly purchase the same financial
futures. Should the event that the Fund intends to hedge (or protect) against
not materialize, however, the option may expire worthless, in which case the
Fund would lose the premium paid therefor.

Segregated Accounts (International Fund) To the extent required to comply with
Securities and Exchange Commission Release 10666 and any related SEC policies,
when purchasing a futures contract, or writing a put option, the Fund will
maintain in a segregated account at its custodian bank cash, U.S. Government and
other permitted securities to cover its position.

Forward Foreign Currency Contracts (Small-Cap Fund, Growth Opportunities Fund) A
forward foreign currency contract involves an obligation to purchase or sell a
specific amount of a specific currency at a set price at a future date. Each
Fund expects to enter into forward foreign currency contracts in primarily two
circumstances. First, when a Fund enters into a contract for the purchase or
sale of a security denominated in a foreign currency, it may desire to "lock in"
the U.S. dollar price of the security. By entering into a forward contract for
the purchase or sale of the amount of foreign currency involved in the
underlying security transaction, each Fund will be able to protect against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the subject foreign currency during the period between the date
the security is purchased or sold and the date on which payment is made or
received.

Second, when management believes that the currency of a particular foreign
country may suffer a decline against the U.S. dollar, each Fund may enter into a
forward contract to sell the amount of foreign currency approximating the value
of some or all of each Fund's portfolio securities denominated in such foreign
currency or, in the alternative, each Fund may use a cross-hedging technique
whereby it sells another currency which each Fund expects to decline in a
similar way but which has a lower transaction cost. Precise matching of the
forward contract amount and the value of the securities involved will not
generally be possible since the future value of such securities denominated in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date the forward contract is entered into and
the date it matures. Each Fund does not intend to enter into such forward
contracts under this second circumstance on a continuous basis.

Repurchase Agreements (Small-Cap Fund, Growth Opportunities Fund) If each Fund
enters into repurchase agreements as provided in clause (4) of the fundamental
investment restrictions above, it will do so only with those primary reporting
dealers that report to the Federal Reserve Bank of New York and with the 100
largest United States commercial banks and the underlying securities purchased
under the agreements will consist only of those securities in which each Fund
otherwise may invest.

Foreign Currency Hedging Techniques (Small-Cap Fund, Growth Opportunities Fund)
The Funds may utilize various foreign currency hedging techniques, including
forward foreign currency contracts and foreign currency put and call options.

Foreign Currency Put and Call Options (Small-Cap Fund, Growth Opportunities
Fund) The Funds also may purchase foreign currency put options and write foreign
currency call options on U.S. exchanges or U.S. over-the-counter markets. A put
option gives the Funds, upon payment of a premium, the right to sell a currency
at the exercise price until the expiration of the option and serves to insure
against adverse currency price movements in the underlying portfolio assets
denominated in that currency.

Exchange-listed options markets in the United States include several major
currencies, and trading may be thin and illiquid. A number of major investment
firms trade unlisted options which are more flexible than exchange-listed
options with respect to strike price and maturity date. Unlisted options
generally are available in a wider range of

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currencies. Unlisted foreign currency options are generally less liquid than
listed options and involve the credit risk associated with the individual
issuer. Unlisted options, together with other illiquid securities, are subject
to a limit of 15% of each Funds' net assets.

A call option written by the Funds gives the purchaser, upon payment of a
premium, the right to purchase from the a currency at the exercise price until
the expiration of the option. The Funds may write call options on a foreign
currency only in conjunction with a purchase of a put option on that currency.
Such a strategy is designed to reduce the cost of downside currency protection
by limiting currency appreciation potential. The face value of such writing may
not exceed 90% of the value of the securities denominated in such currency
invested in by the Funds or in such cross currency (referred to above) to cover
such call writing.

The Funds' custodian will segregate cash or permitted securities belonging to
the Funds in an amount not less than that required by SEC Release 10666 and
related policies with respect to the Funds' assets committed to (a) writing
options, (b) forward foreign currency contracts and (c) cross hedges entered
into by the Funds. If the value of the securities segregated declines,
additional cash or debt securities will be added on a daily basis (i.e., marked
to market), so that the segregated amount will not be less than the amount of
the Funds' commitments with respect to such written options, forward foreign
currency contracts and cross hedges.

Stock Options, Options on Stock Indices and Stock Index Futures (Small-Cap Fund)
The Fund may write put and call options on stocks only if they are covered, and
such options must remain covered so long as the Fund is obligated as a writer.
The Fund will not (a) write puts having an aggregate exercise price greater than
25% of the Fund's total net assets; or (b) purchase (i) put options on stocks
not held in the Fund's portfolio, (ii) put options on stock indices or (iii)
call options on stocks or stock indices if, after any such purchase, the
aggregate premiums paid for such options would exceed 20% of the Fund's total
net assets.

Call Options on Stock (Small-Cap Fund) The Fund may, from time to time, write
call options on its portfolio securities. The Fund may write only call options
which are "covered," meaning that the Fund either owns the underlying security
or has an absolute and immediate right to acquire that security, without
additional cash consideration, upon conversion or exchange of other securities
currently held in its portfolio. In addition, the Fund will not permit the call
to become uncovered prior to the expiration of the option or termination through
a closing purchase transaction as described below. If the Fund writes a call
option, the purchaser of the option has the right to buy (and the Fund has the
obligation to sell) the underlying security at the exercise price throughout the
term of the option. The amount paid to the Fund by the purchaser of the option
is the "premium." The Fund's obligation to deliver the underlying security
against payment of the exercise price would terminate either upon expiration of
the option or earlier if the Fund were to effect a "closing purchase
transaction" through the purchase of an equivalent option on an exchange. There
can be no assurance that a closing purchase transaction can be effected. The
Fund does not intend to write covered call options with respect to securities
with an aggregate market value of more than 5% of it's gross assets at the time
an option is written. This percentage limitation will not be increased without
prior disclosure in our current prospectus.

The Fund would not be able to effect a closing purchase transaction after it had
received notice of exercise. In order to write a call option, the Fund is
required to comply with the rules of The Options Clearing Corporation and the
various exchanges with respect to collateral requirements. The Fund may not
purchase call options except in connection with a closing purchase transaction.
It is possible that the cost of effecting a closing purchase transaction may be
greater than the premium received by the Fund for writing the option.

Generally, the Fund intends to write listed covered call options during periods
when it anticipates declines in the market values of portfolio securities
because the premiums received may offset to some extent the decline in the
Fund's net asset value occasioned by such declines in market value. Except as
part of the "sell discipline" described below, the Fund will generally not write
listed covered call options when it anticipates that the market values of it's
portfolio securities will increase.

One reason for the Fund to write call options is as part of a "sell discipline."
If the Fund decides that a portfolio security would be overvalued and should be
sold at a certain price higher than the current price, it could write an option
on the stock at the higher price. Should the stock subsequently reach that price
and the option be exercised, the Fund would,

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<PAGE>

in effect, have increased the selling price of that stock, which it would have
sold at that price in any event, by the amount of the premium. In the event the
market price of the stock declined and the option were not exercised, the
premium would offset all or some portion of the decline. It is possible that the
price of the stock could increase beyond the exercise price; in that event, the
Fund would forego the opportunity to sell the stock at that higher price. In
addition, call options may be used as part of a different strategy in connection
with sales of portfolio securities. If, in the judgment of the Fund Management,
the market price of a stock is overvalued and it should be sold, the Fund may
elect to write a call option with an exercise price substantially below the
current market price. As long as the value of the underlying security remains
above the exercise price during the term of the option, the option will, in all
probability, be exercised, in which case the Fund will be required to sell the
stock at the exercise price. If the sum of the premium and the exercise price
exceeds the market price of the stock at the time the call option is written,
the Fund would, in effect, have increased the selling price of the stock. The
Fund would not write a call option in these circumstances if the sum of the
premium and the exercise price were less than the current market price of the
stock.

Put Options on Stock (Small-Cap Fund) The Fund may also write listed put
options. If the Fund writes a put option, it is obligated to purchase a given
security at a specified price at any time during the term of the option.

Writing listed put options is a useful portfolio investment strategy when the
Fund has cash or other reserves available for investment as a result of sales of
Fund shares or, more importantly, because Fund Management believes a more
defensive and less fully invested position is desirable in light of market
conditions. If the Fund Management wishes to invest its cash or reserves in a
particular security at a price lower than current market value, it may write a
put option on that security at an exercise price which reflects the lower price
it is willing to pay. The buyer of the put option generally will not exercise
the option unless the market price of the underlying security declines to a
price near or below the exercise price. If the Fund writes a listed put, the
price of the underlying stock declines and the option is exercised, the premium,
net of transaction charges, will reduce the purchase price paid by the Fund for
the stock. The price of the stock may decline by an amount in excess of the
premium, in which event the Fund would have foregone an opportunity to purchase
the stock at a lower price.

If, prior to the exercise of a put option, the Fund determines that it no longer
wishes to invest in the stock on which the put option had been written, the Fund
may be able to effect a closing purchase transaction on an exchange by
purchasing a put option of the same Fund as the one which it has previously
written. The cost of effecting a closing purchase transaction may be greater
than the premium received on writing the put option and there is no guarantee
that a closing purchase transaction can be effected.

Stock Index Options (Small-Cap Fund) Except as describe below, the Fund will
write call options on indices only if on such date it holds a portfolio of
stocks at least equal to the value of the index times the multiplier times the
number of contracts. When the Fund writes a call option on a broadly-based stock
market index, it will segregate or put into escrow with its custodian, or pledge
to a broker as collateral for the option, one or more "qualified securities"
with a market value at the time the option is written of not less than 100% of
the current index value times the multiplier times the number of contracts.

Segregated Accounts (Small-Cap Fund) If the Fund has written an option on an
industry or market segment index, it will segregate or put into escrow with its
custodian, or pledge to a broker as collateral for the option, at least ten
"qualified securities," which are securities of an issuer in such industry or
market segment, with a market value at the time the option is written of not
less than 100% of the current index value times the multiplier times the number
of contracts. A "qualified security" is an equity security which is listed on a
national securities exchange or listed on the National Association of Securities
Dealers Automated Quotation System against which the Fund has not written a
stock call option and which has not been hedged by the Fund by the sale of stock
index futures. Such securities will include stocks which represent at least 50%
of the weighing of the industry or market segment index and will represent at
least 50% of the Fund's holdings in that industry or market segment. No
individual security will represent more than 25% of the amount so segregated,
pledged or escrowed. If at the close of business on any day the market value of
such qualified securities so segregated, escrowed or pledged falls below 100% of
the current index value times the multiplier times the number of contracts, the
Fund will so segregate, escrow or pledge an amount in cash, Treasury bills or
other high-grade short-term obligations equal in value to the difference. In
addition, when the Fund writes a call on an index which is in-the-money at the
time the call is written, the Fund will segregate with its custodian or pledge
to the broker

8
<PAGE>

as collateral cash, equity securities, non-investment grade debt, short term
U.S. Government securities or other high-grade short-term debt obligations equal
in value to the amount by which the call is in-the-money times the multiplier
times the number of contracts. Any amount segregated pursuant to the foregoing
sentence may be applied to the Small-Cap Fund's obligation to segregate
additional amounts in the event that the market value of the qualified
securities falls below 100% of the current index value times the multiplier
times the number of contracts. However, if the Fund holds a call on the same
index as the call written where the exercise price of the call held is equal to
or less than the exercise price of the call written or greater than the exercise
price of the call written if the difference is maintained by the Fund in cash,
equity securities, non-investment grade debt, treasury bills or other high-grade
short-term obligations in a segregated account with its custodian, it will not
be subject to the requirements describe in this paragraph. In instances
involving the purchase of stock index futures contracts by the Fund, an amount
of cash or permitted securities equal to the market value of the futures
contracts will be deposited in a segregated account with the its custodian
and/or in a margin account with a broker to collateralize the position and
thereby insure that the use of such futures are unleveraged.

Under regulations of the Commodity Exchange Act, investment companies registered
under the Act are exempt from the definition of "commodity pool operator,"
provided all of the Fund's commodity futures or commodity options transactions
constitute bona fide hedging transactions within the meaning of the CFTC's
regulations. The Fund will use stock index futures and options on futures as
described herein in a manner consistent with this requirement.

Stock Index Futures (Small-Cap Fund) The Fund will engage in transactions in
stock index futures contracts as a hedge against changes resulting from market
conditions in the values of securities which are held in the Fund's portfolio or
which it intends to purchase. The Fund will engage in such transactions when
they are economically appropriate for the reduction of risks inherent in the
ongoing management of the Fund. The Fund may not purchase or sell stock index
futures if, immediately thereafter, more than one-third of its net assets would
be hedged and, in addition, except as described above in the case of a call
written and held on the same index, will write call options on indices or sell
stock index futures only if the amount resulting from the multiplication of the
then current level of the index (or indices) upon which the option or future
contract(s) is based, the applicable multiplier(s), and the number of futures or
options contracts which would be outstanding, would not exceed one-third of the
value of the Fund's net assets.

RISK FACTORS

Risk Factors (Affiliated Fund) As stated in the Prospectus, the Fund may invest
no more than 5% of its net assets (at the time of investment) in lower-rated,
high-yield bonds. In general, the market for lower-rated, high-yield bonds is
more limited than the market for higher-rated bonds, and because trading in such
bonds may be thinner and less active, the market prices of such bonds may
fluctuate more than the prices of higher-rated bonds, particularly in times of
market stress. In addition, while the market for high-yield, corporate debt
securities has been in existence for many years, the market in recent years
experienced a dramatic increase in the large-scale use of such securities to
fund highly-leveraged corporate acquisitions and restructurings. Accordingly,
past experience may not provide an accurate indication of future performance of
the high-yield bond market, especially during periods of economic recession.
Other risks which may be associated with lower-rated, high-yield bonds include
their relative insensitivity to interest-rate changes; the exercise of any of
their redemption or call provisions in a declining market which may result in
their replacement by lower-yielding bonds; and legislation, from time to time,
which may adversely affect their market. Since the risk of default is higher
among lower-rated, high-yield bonds, Lord Abbett's research and analyses are an
important ingredient in the selection of such bonds. Through portfolio
diversification, good credit analysis and attention to current developments and
trends in interest rates and economic conditions, investment risk can be
reduced, although there is no assurance that losses will not occur. The Fund
does not have any minimum rating criteria applicable to the fixed-income
securities in which it invests.

Risks of Transactions in Stock Options (Small-Cap Fund) Writing options involves
the risk that there will be no market in which to effect a closing transaction.
An option position may be closed out only on an exchange which provides a
secondary market for an option of the same Fund. Although the Fund will
generally write only those options for which there appears to be an active
secondary market, there is no assurance that a liquid secondary market on an
exchange will exist for any particular option, or at any particular time, and
for some options no secondary market on an exchange may exist. If the Fund, as a
covered call option writer, is unable to effect a closing purchase transaction

9
<PAGE>

in a secondary market, it will not be able to sell the underlying security until
the option expires or it delivers the underlying security upon exercise.

Risks of Options on Indices (Small-Cap Fund) The Fund's purchase and sale of
options on indices will be subject to risks described above under "Risk of
Transactions in Stock Options". In addition, the distinctive characteristics of
options on indices create certain risks that are not present with stock options.

Because the value of an index option depends upon movements in the level of the
index rather than the price of a particular stock, whether the Fund will realize
a gain or loss on the purchase or sale of an option on an index depends upon
movements in the level of stock prices in the stock market generally or in an
industry or market segment rather than movements in the price of a particular
stock. Accordingly, successful use by the Fund of options on indices would be
subject to the investment adviser's ability to predict correctly movements in
the direction of the stock market generally or of a particular industry. This
requires different skills and techniques than predicting changes in the price of
individual stocks.

Index prices may be distorted if trading of certain stocks included in the index
is interrupted. Trading in the index option also may be interrupted in certain
circumstances, such as if trading were halted in a substantial number of stocks
included in the index. If this occurred, the Fund would not be able to close out
options which it had purchased or written and, if restrictions on exercise were
imposed, may be unable to exercise an option it holds, which could result in
substantial losses to the Fund. It is the Fund's policy to purchase or write
options only on indices which include a number of stocks sufficient to minimize
the likelihood of a trading halt in the index.

Trading in index options commenced in April 1983 with the S&P 100 option
(formerly called the CBOE 100). Since that time a number of additional index
option contracts have been introduced including options on industry indices.
Although the markets for certain index option contracts have developed rapidly,
the markets for other index options are still relatively illiquid. The ability
to establish and close out positions on such options will be subject to the
development and maintenance of a liquid secondary market. It is not certain that
this market will develop in all index option contracts. The Fund will not
purchase or sell any index option contract unless and until, in Fund
management's opinion, the market for such options has developed sufficiently
that such risk in connection with such transactions in no greater than such risk
in connection with options on stocks.

Special Risks of Writing Calls on Indices (Small-Cap Fund) Because exercises of
index options are settled in cash, a call writer cannot determine the amount of
its settlement obligations in advance and, unlike call writing on specific
stocks, cannot provide in advance for, or cover, its potential settlement
obligations by acquiring and holding the underlying securities. However, the
Fund will write call options on indices only under the circumstances described
above under "Limitations on the Purchases and Sales of Stock Options, Options on
Stock Indices and Stock Index Futures."

Price movements in the Fund's portfolio probably will not correlate precisely
with movements in the level of the index and, therefore, the Fund bears the risk
that the price of the securities held may not increase as much as the index. In
such event the Fund would bear a loss on the call which is not completely offset
by movements in the price of the Fund's portfolio. It is also possible that the
index may rise when the Fund's portfolio of stocks does not rise. If this
occurred, the Fund would experience a loss on the call which is not offset by an
increase in the value of its portfolio and might also experience a loss in its
portfolio. However, because the value of a diversified portfolio will, over
time, tend to move in the same direction as the market, movements in the value
of the Fund in the opposite direction to the market would be likely to occur for
only a short period or to a small degree.

Unless the Fund has other liquid assets that are sufficient to satisfy the
exercise of a call, the Fund would be required to liquidate portfolio securities
in order to satisfy the exercise. Because an exercise must be settled within
hours after receiving the notice of exercise, if the Fund fails to anticipate an
exercise, it may have to borrow (in amounts not exceeding 20% of the Fund's
total assets) pending settlement of the sale of securities in its portfolio and
would incur interest charges thereon.

10
<PAGE>

When the Fund has written a call, there is also a risk that the market may
decline between the time the call is written and the time the Fund is able to
sell stocks in its portfolio. As with stock options, the Fund will not learn
that an index option has been exercised until the day following the exercise
date but, unlike a call on stock where the Fund would be able to deliver the
underlying securities in settlement, the Fund may have to sell part of its stock
portfolio in order to make settlement in cash, and the price of such stocks
might decline before they can be sold. This timing risk makes certain strategies
involving more than one option substantially more risky with index options than
with stock options. For example, even if an index call which the Fund has
written is "covered" by an index call held by the Fund with the same strike
price, the Fund will bear the risk that the level of the index may decline
between the close of trading on the date the exercise notice is filed with the
clearing corporation and the close of trading on the date the Fund exercises the
call it holds or the time the Fund sells the call which in either case would
occur no earlier than the day following the day the exercise notice was filed.

Special Risks of Purchasing Puts and Calls on Indices (Small-Cap Fund) If the
Fund holds an index option and exercises it before final determination of the
closing index value for that day, it runs the risk that the level of the
underlying index may change before closing. If such a change causes the
exercised option to fall out-of-the-money, the Fund will be required to pay the
difference between the closing index value and the exercise price of the option
(times the applicable multiple) to the assigned writer. Although the Fund may be
able to minimize this risk by withholding exercise instructions until just
before the daily cut off time or by selling rather than exercising an option
when the index level is close to the exercise price it may not be possible to
eliminate this risk entirely because the cut off times for index options may be
earlier than those fixed for other types of options and may occur before
definitive closing index values are announced.

2.
Board Members and Officers

The following board member is a partner of Lord, Abbett & Co. ("Lord Abbett"),
The General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203. He
has been associated with Lord Abbett for over five years and is also an officer,
director, or trustee of twelve other Lord Abbett-sponsored funds. He is an
"interested person" as defined in the Act, and as such, may be considered to
have an indirect financial interest in the Rule 12b-1 Plan described in the
Prospectus.

Robert S. Dow, age 53, Chairman and President

The following outside directors are also directors or trustees of some or all of
the twelve other Lord Abbett-sponsored funds referred to above.

E. Thayer Bigelow
Time Warner Inc.
1271 Avenue of the Americas
New York, New York

Senior Adviser, Time Warner Inc. Formerly, Acting Chief Executive Officer of
Courtroom Television Network (1997 - 1998). Formerly, President and Chief
Executive Officer of Time Warner Cable Programming, Inc. (1991 - 1997). Prior to
that, President and Chief Operating Officer of Home Box Office, Inc. Age 57.

William H. T. Bush
Bush-O'Donnell & Co., Inc.
101 South Hanley Road, Suite 1025
St. Louis, Missouri

Co-founder and Chairman of the Board of financial advisory firm of
Bush-O'Donnell & Company. Age 60.

Robert B. Calhoun

11
<PAGE>

Monitor Clipper Partners
650 Madison Avenue, 9th Floor
New York, New York

Managing Director of Monitor Clipper Partners and President of The Clipper Group
L.P., both private equity investment funds. Age 56.

Stewart S. Dixon
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois

Partner in the law firm of Wildman, Harrold, Allen & Dixon. Age 68.

John C. Jansing
162 S. Beach Road
Hobe Sound, Florida

Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 73.

C. Alan MacDonald
Directorship Inc.
8 Sound Shore Drive
Greenwich, Connecticut

Managing Director of Directorship Inc., a consultancy in board management and
corporate governance. Formerly General Partner of the Marketing Partnership,
Inc., a full service marketing consulting firm (1994 - 1997). Prior to that,
Chairman and Chief Executive Officer of Lincoln Snacks, Inc., manufacturer of
branded snack foods (1992 - 1994). His career spans 36 years at Stouffers and
Nestle with 18 of the years as Chief Executive Officer. Currently serves as
Director of DenAmerica Corp., J.B. Williams Company, Inc., Fountainhead Water
Company and Exigent Diagnostics. Age 65.

Hansel B. Millican, Jr.
Rochester Button Company
1328 Broadway (Suite 816)
New York, New York

President and Chief Executive Officer of Rochester Button Company. Age 70.

Thomas J. Neff
Spencer Stuart
277 Park Avenue
New York, New York

Chairman of Spencer Stuart, an executive search consulting firm. Currently
serves as a Director of Ace, Ltd. (NYSE).

Age 61.

12
<PAGE>

For the Fiscal Year Ended October 31, 1998 - Affiliated Fund
For the Fiscal Year Ended November 30, 1998 - Research Fund - Small-Cap Fund,
Growth Opportunities Fund
For the Fiscal Year Ended November 30, 1998 - Investment Trust -
High Yield Fund
For the Fiscal Year Ended October 31, 1998 - Securities Trust -
International Fund

The following table sets forth the compensation accrued for each Fund's
outside directors/trustees.

<TABLE>
<CAPTION>
Aggregate
Name of Director Compensation Accrued by each Fund(1)
- ---------------- ---------------------------------------------------
Investment
Research Fund - Trust -
Growth High Securities Trust -
Affiliated Small-Cap Opportunities Yield International
Fund Fund & Fund Fund Fund
---- ---------------- ---- ----
<S> <C> <C> <C> <C>
E. Thayer Bigelow $00,000 $000 $00,000 $000
William H. T. Bush* $0 $0 $0 $0
Robert B. Calhoun** $0 $0 $0 $0
Stewart S. Dixon $00,000 $000 $00,000 $000
John C. Jansing(4) $00,000 $000 $00,000 $000
C. Alan MacDonald $00,000 $000 $00,000 $000
Hansel B. Millican, Jr. $00,000 $000 $00,000 $000
Thomas J. Neff $00,000 $000 $00,000 $000
</TABLE>

* Elected as of August 13, 1998
** Elected as of June 17, 1998

The following table sets forth information with respect to the
equity-based benefits accrued for outside directors/trustees by the Lord
Abbett-sponsored funds.

Name of Director Pension or Retirement Benefits
- ---------------- Accrued by each Fund and Twelve Other
Lord Abbett-sponsored Funds(2)
------------------------------

E. Thayer Bigelow $00,000
William H.T. Bush* $0
Robert B. Calhoun** $0
Stewart S. Dixon $00,000
John C. Jansing(4) $00,000
C. Alan MacDonald $00,000
Hansel B. Millican, Jr. $00,000
Thomas J. Neff $00,000

13
<PAGE>

The following table sets forth the total compensation payable by such
funds to the outside director/trustees. No director/trustee of the funds
associated with Lord Abbett and no officer of the funds received any
compensation from the funds for acting as a director or officer.

Name of Director For Year Ended October 31 1998
- --------------- Total Compensation Accrued by each Fund and
Twelve Other Lord Abbett-sponsored Funds(3)
--------------------------------------------

(1) Outside directors' fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored funds based on the
net assets of each fund. A portion of the fees payable by each Fund to its
outside directors is being deferred under a plan that deems the deferred
amounts to be invested in shares of the Fund for later distribution to the
directors. The amount of aggregate compensation payable by each Fund as of
its 1998 fiscal year-end deemed invested in Fund shares includes dividends
reinvested and changes in net asset value applicable to such deemed
investments.

(2) The amounts were accrued by the Lord Abbett-sponsored funds for the 12
months ended October 31, 1998 with respect to the equity based plans
established for independent directors in 1996. This plan supercedes a
previously approved retirement plan for all future directors. Directors
participating in the retirement plan had the option to convert their
accrued benefits under the plan. All of the outside directors except one
made such an election.

(3) This table shows aggregate compensation, including directors/trustees fees
and attendance fees for board and committee meetings, of a nature referred
to in footnote one, accrued by the Lord Abbett-sponsored funds during the
year ended December 31, 1997. The amounts of the aggregate compensation
payable as of October 31, 1998 deemed invested in Fund shares, including
dividends reinvested and changes in net asset value applicable to such
deemed investments were, for Affiliated Fund, Mr. Bigelow, $000,000; Mr.
Dixon, $000,000; Mr. Jansing, $000,000; Mr. MacDonald, $000,000; Mr.
Millican, $000,000 and Mr. Neff, $000,000. If the amounts deemed invested
in Fund shares were added to each director/trustee's actual holdings of
Fund shares as of October 31, 1998, each would own the following: Mr.
Bigelow, 00,000 shares; Mr. Dixon, 00,000 shares; Mr. Jansing, 00,000
shares; Mr. MacDonald, 00,000 shares; Mr. Millican, 00,000 shares; and Mr.
Neff, 00,000 shares.

For Research Fund -Small-Cap Fund and Growth Opportunities Fund, the
amounts of the aggregate compensation payable by the Fund as of November
30, 1998 deemed invested in Fund shares, including dividends reinvested
and changes in net asset value applicable to such deemed investments,
were: Mr. Bigelow, $000; Mr. Dixon, $000; Mr. Jansing, $000; Mr.
MacDonald, $000; Mr. Millican, $000; and Mr. Neff, $000. If the amounts
deemed invested in Fund shares were added to each director's actual
holdings of Fund shares as of November 30, 1998 each would own, the
following: Mr. Bigelow, 000 shares; Mr. Dixon, 000 shares; Mr. Jansing,
000 shares; Mr. MacDonald, 000 shares; Mr. Millican, 000 shares; and Mr.
Neff, 000 shares.

For Investment Trust -High Yield Fund, the amounts of aggregate
compensation payable by the Fund as of November 30, 1998 deemed invested
in Fund shares, including dividends reinvested and changes in net asset
value applicable to such deemed investments, were: Mr. Bigelow, $000,000;
Mr. Dixon, $000,000; Mr. Jansing, $000,000; Mr. MacDonald, $000,000; Mr.
Millican, $000,000; and Mr. Neff, $000,000. If the amounts deemed invested
in Fund shares were added to each director's actual holdings of Fund
shares as of November 30, 1998, each would own, the

14
<PAGE>

following: Mr. Bigelow, 000,000 shares; Mr. Dixon, 000,000 shares; Mr.
Jansing, 000,000 shares; Mr. MacDonald, 000,000 shares; Mr. Millican,
000,000 shares; and Mr. Neff, 000,000 shares.

For Securities Trust - International Fund, the amounts of the aggregate
compensation payable by the Fund as of October 31, 1998 deemed invested in
Fund shares, including dividends reinvested and changes in net asset value
applicable to such deemed investments, were: Mr. Bigelow, $000,000; Mr.
Dixon, $000,000; Mr. Jansing, $000,000; Mr. MacDonald, $000,000; Mr.
Millican, $000,000; and Mr. Neff, $000,000. If the amounts deemed invested
in Fund shares were added to each director's actual holdings of Fund
shares as of October 31, 1998, each would own, the following: Mr. Bigelow,
000,000 shares; Mr. Dixon, 000,000 shares; Mr. Jansing, 000,000 shares;
Mr. MacDonald, 000,000 shares; Mr. Millican, 000,000 shares; and Mr. Neff,
000,000 shares.

(4) Mr. Jansing chose to continue to receive benefits under the retirement
plan, which provides that outside directors (trustees) may receive annual
retirement benefits for life equal to their final annual retainer
following retirement at or after age 72 with at least ten years of
service. Thus, if Mr. Jansing were to retire and the annual retainer
payable by the funds were the same as it is today, he would receive annual
retirement benefits of $50,000.

Except where indicated, the following executive officers of each Fund have been
associated with Lord Abbett for over five years. Of the following, Messrs.
Brown, Fetch, Carper, Gerber, Hilstad, Hudson, McGruder, Morris, and Walsh are
partners of Lord Abbett; the others are employees:

Executive Vice Presidents:

Zane E. Brown, age 46 (International Fund )

Robert P. Fetch, age 45 (Small-Cap Fund) (with Lord Abbett since 1995 - formerly
Managing Director at Prudential Investment Advisors from 1983 to 1995)

Robert I. Gerber, age 44 (High Yield Fund) (with Lord Abbett since 1997 -
formerly Senior Portfolio Manager at Sanford Bernstein & Co. from 1992 - 1997)

W. Thomas Hudson, age 56 (Affiliated Fund )

Robert G. Morris, age 54 (Small-Cap Fund, Growth Opportunities Fund,
International Fund, High Yield Fund)

Stephen J. McGruder, age 55 (Growth Opportunities Fund) (with Lord Abbett since
1995 - formerly Vice President of Wafra Securities from 1988 to 1995)

Vice Presidents:

Paul A. Hilstad, age 55, Vice President and Secretary (all Funds) (with Lord
Abbett since 1995 - formerly Senior Vice President and General Counsel of
American Capital Management & Research, Inc.)

Zane E. Brown, age 46 (Small-Cap Fund)

Daniel E. Carper, age 46 (all Funds)

Timothy Horan, age 44 (International Fund) (with Lord Abbett since 1996 -
formerly Senior Manager at Credit Suisse from 1994 to 1995; prior thereto Vice
President at Aubrey G. Lanston & Co. from 1992 to 1994)

Lawrence H. Kaplan, age 41, Vice President and Assistant Secretary (all Funds)
(with Lord Abbett since 1997 - formerly Vice President and Chief Counsel of
Salomon Brothers Asset Management Inc from 1995 to 1997; prior thereto Senior
Vice President, Director and General Counsel of Kidder Peabody Asset Management,
Inc.)

Thomas F. Konop, age 56, Vice President and Assistant Secretary (all Funds)

15
<PAGE>

Jerald Lanzotti, age 31 (International Fund)

Gregory M. Macosko, age 51 (Small-Cap Fund) (with Lord Abbett since 1997 -
formerly Analyst with Royce Associates from 1991 to 1997)

Robert Morris, age 54 (Affiliated Fund)

A. Edward Oberhaus III, age 38 (all Funds)

Keith F. O'Connor, age 43 (all Funds)

Fernando Saldanha, age 45 (International Fund) (with Lord Abbett since 1998 -
formerly Economist and Senior Financial Officer of World Bank (IBRO) from 1988
to 1998)

Eli Salzman, age 34 (Affiliated Fund) (with Lord Abbett since 1997 - formerly
Vice President of Mutual of America Capital Corp.; prior thereto Vice President
of Mitchell Hutchins Asset Mgt. from 1986 to 1996)

Christopher J. Towle, age 41 (International Fund)

John J. Walsh, age 62 (all Funds); and

Treasurer:

Donna M. McManus, age 37, Treasurer (all Funds) (with Lord Abbett since 1996 -
formerly a Senior Manager at Deloitte & Touche LLP).

As of October 31, 1998, our officers and directors owned as a group less than 1%
of each Fund's shares.

The Funds' By-Laws provide that each Fund shall not hold a meeting of its
stockholders in any year unless one or more matters are required to be acted on
by stockholders under the Investment Company Act of 1940, as amended (the
"Act"), or unless called by a majority of the Board of Directors (Trustees) or
by shareholders holding at least one quarter of the stock of each Fund
outstanding and entitled to vote at the meeting.

3.
Investment Advisory and Other Services

As described under "Management" in the Prospectus, Lord Abbett is the investment
manager of the Funds. Ten of the general partners of Lord Abbett are officers
and/or board members of the Funds, as follows: Zane E. Brown; Daniel E. Carper;
Robert S. Dow; Robert P. Fetch; Robert I. Gerber; Paul A. Hilstad; W. Thomas
Hudson; Stephen J. McGruder; Robert G. Morris; Christopher J. Towle; and John J.
Walsh.

The other general partners who are neither officers nor directors of the Funds
are Stephen Allen, John E. Erard, Daria L. Foster, Michael B. McLaughlin, R.
Mark Pennington, and Robert J. Noelke. The address of each partner is The
General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203.

The services performed by Lord Abbett are described in the Prospectus under
"Management." Under its Management Agreement, Affiliated Fund pays Lord Abbett a
monthly fee, based on average daily net assets for each month, at the annual
rate of .5 of 1% of the portion of its net assets not in excess of $200,000,000;
.4 of 1% of the portion in excess of $200,000,000, but not in excess of
$500,000,000; .375 of 1% of the portion in excess of $500,000,000, but not in
excess of $700,000,000; .35 of 1% of the portion in excess of $700,000,000, but
not in excess of $900,000,000; and .3 of 1% of the portion in excess of
$900,000,000.

For the fiscal years ended October 31, 1998, 1997 and 1996, the management fees
paid to Lord Abbett by Affiliated Fund amounted to $26,317,934, $22,192,209 and
$17,683,694, respectively.

16
<PAGE>

Under its Management Agreement, Small-Cap Fund is obligated to pay Lord Abbett a
monthly fee, based on average daily net assets for each month, at the annual
rate of .75 of 1% of the Small-Cap Fund's average daily net assets. For the
period December 13, 1995 (commencement of operations) to November 30, 1996, Lord
Abbett waived $24,461 in management fees with respect to Small-Cap Fund. For the
same time period, Lord Abbett did not receive management fees with respect to
Small-Cap Fund. For the fiscal years ended November 30, 1998 and November 30,
1997 and the period December 13, 1995 (commencement of operations) to November
30, 1996, the management fees paid to Lord Abbett by Small-Cap Fund amounted to
$______, $1,075,019 and $0 , respectively.

Under the Management Agreement, Growth Opportunities Fund is obligated to pay
Lord Abbett a monthly fee, based on average daily net assets for each month, at
the annual rate of .90 of 1% of the Fund's average daily net assets. For the
fiscal years ended November 30, 1996 and November 30, 1997, the management fee
was .75 of 1% and was waived by Lord Abbett with respect to the Fund and, except
for this waiver, would have amounted to $8,249 and $10,844, respectively. For
the fiscal year ended November 30, 1998, the fee amounted to $_____, but Lord
Abbett waived all but $_____. On September 15, 1998, the Fund's shareholders
voted to raise the management fee to .90 of 1%.

Under its Management Agreement, International Fund is obligated to pay Lord
Abbett a monthly fee, based on average daily net assets for each month, at the
annual rate of .75 of 1%. For the fiscal year ended October 31,1998 and for the
period December 13, 1996 (commencement of operations) to October 31, 1997, the
management fees paid to Lord Abbett by International Fund amounted to $_____ and
$ 127,715, respectively.

Lord Abbett has entered into an agreement with Fuji-Lord Abbett International
Ltd. ("the Sub-Adviser"), under which the Sub-Adviser provides Lord Abbett with
advice with respect to the International Portfolio's assets. The Sub-Adviser is
controlled by Fuji Investment Management Co. (Tokyo). Fuji Bank Limited of
Tokyo, Japan ("Fuji Bank") directly owned 40% of the outstanding voting stock of
the Sub-Adviser. Fuji Investment Management Co. (Tokyo) is an affiliate of Fuji
Bank. Lord Abbett owns approximately 27% of such outstanding voting stock. As of
November 30, 1998, the Sub-Adviser manages approximately $[915] million, which
is invested globally. The Sub-Adviser furnishes Lord Abbett with advice and
recommendations with respect to the International Portfolio's assets, including
advice about the allocation of investments among foreign securities markets and
foreign equity and debt securities markets and foreign equity and debt
securities and, subject to consultation with Lord Abbett, advice as to cash
holdings and what securities in the portfolio should be purchased, held or
disposed of. The Sub-Adviser also gives advice with respect to foreign currency
matters. Lord Abbett is obligated to pay the Sub-Adviser a monthly fee, based on
average daily net assets for each month, at the annual rate of .375 of 1%. For
the fiscal year ended October 31, 1998 and for the period December 13, 1996
(commencement of operations) to October 31, 1997, the fees paid to the
Sub-Adviser by Lord Abbett were $____ and $____, respectively.

Each Fund's fee is allocated among all of its classes based on each's
proportionate share of such daily net assets.

In addition, each Fund is obligated to pay all expenses not expressly assumed by
Lord Abbett, including, without limitation, outside directors' fees and
expenses, association membership dues, legal and auditing fees, taxes, transfer
and dividend disbursing agent fees, shareholder servicing costs, expenses
relating to shareholder meetings, expenses of preparing, printing and mailing
stock certificates and shareholder reports, expenses of registering our shares
under federal and state securities laws, expenses of preparing, printing and
mailing prospectuses to existing shareholders, insurance premiums, brokerage and
other expenses connected with executing portfolio transactions.

Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281 are
the independent auditors for each Fund and must be approved at least annually by
each Fund's Board of Directors (Trustees) to continue in such capacity. They
perform audit services for each Fund including the audits of financial
statements included in each Fund's annual report to shareholders.

The Bank of New York ("BNY"), 48 Wall Street, New York, New York 10268, is each
Fund's custodian. In accordance with the requirements of Rule 17f-5, each Fund's
directors (trustees) have approved arrangements permitting each Fund's foreign
assets not held by BNY or its foreign branches to be held by certain qualified
foreign banks and depositories.

The Sub-Custodians of BNY are:

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<PAGE>

Euro-Clear (a transnational securities depository); Australia: ANZ Banking
Group; Austria: Creditanstalt-Bankverein; Canada: Canadian Imperial Bank of
Commerce; Chile: Citibank, N.A.; Czech Republic: Ceskoslovenska Obchodni Banka;
Denmark: Den Danske Bank; Finland: Union Bank of Finland; Germany: J.P. Morgan
GmbH; Greece: National Bank of Greece S.A.; Hong Kong, Indonesia, Philippines,
Taiwan and Thailand: Hong Kong & Shanghai Banking Corp.; Hungary: Citibank
Budapest Rt; India: Hong Kong and Shanghai Banking Corporation; Ireland: Allied
Irish Banks, PLC; Israel: Bank Leumi LE-Israel B.M.; Japan: The Fuji Bank, Ltd.;
Jordan: Citibank, N.A.; Korea: Bank of Seoul; Luxembourg: Banque Internationale
A Luxembourg, S.A.; Mexico: Citibank, N.A.; Morocco: Banque Commerciale du
Maroc; Netherlands: Bank van Haften Labouchere; New Zealand: Anz Banking Group
Ltd.; Norway: Den Norske Bank; Pakistan: Citibank, N.A.; Peru: Citibank, N.A.;
Poland: Bank Handlowy w Warszawie S.A.; Portugal: Banco Espirito Santo E
Comercial de Lisboa; Malaysia, Singapore: Development Bank of Singapore; South
Africa: The First National Bank of Southern Africa; Sri Lanka: Hong Kong and
Shanghai Banking Corporation; Sweden: Skandinaviska Enskilda Banken;
Switzerland: Bank Leu; Turkey: Citibank, N.A.; Venezuela: Citibank, N.A.

4.
Portfolio Transactions

Our policy is to obtain best execution on all our portfolio transactions, which
means that we seek to have purchases and sales of portfolio securities executed
at the most favorable prices, considering all costs of the transaction including
brokerage commissions and dealer markups and markdowns and taking into account
the full range and quality of the brokers' services. Consistent with obtaining
best execution, we generally pay, as described below, a higher commission than
some brokers might charge on the same transactions. Our policy with respect to
best execution governs the selection of brokers or dealers and the market in
which the transaction is executed. To the extent permitted by law, we may, if
considered advantageous, make a purchase from or sale to another Lord
Abbett-sponsored fund without the intervention of any broker-dealer.

Broker-dealers are selected on the basis of their professional capability and
the value and quality of their brokerage and research services. Normally, the
selection is made by traders who are officers of the Fund and also are employees
of Lord Abbett. These traders do the trading as well for other accounts --
investment companies (of which they are also officers) and other investment
clients -- managed by Lord Abbett. They are responsible for obtaining best
execution.

We pay a commission rate that we believe is appropriate to give maximum
assurance that our brokers will provide us, on a continuing basis, the highest
level of brokerage services available. While we do not always seek the lowest
possible commissions on particular trades, we believe that our commission rates
are in line with the rates that many other institutions pay. Our traders are
authorized to pay brokerage commissions in excess of those that other brokers
might accept on the same transactions in recognition of the value of the
services performed by the executing brokers, viewed in terms of either the
particular transaction or the overall responsibilities of Lord Abbett with
respect to us and the other accounts they manage. Such services include showing
us trading opportunities including blocks, a willingness and ability to take
positions in securities, knowledge of a particular security or market proven
ability to handle a particular type of trade, confidential treatment, promptness
and reliability.

Some of these brokers also provide research services at least some of which are
useful to Lord Abbett in their overall responsibilities with respect to us and
the other accounts they manage. Research includes the furnishing of analyses and
reports concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts and trading equipment and
computer software packages, acquired from third-party suppliers, that enable
Lord Abbett to access various information bases. Such services may be used by
Lord Abbett in servicing all their accounts, and not all of such services will
necessarily be used by Lord Abbett in connection with their management of the
Fund; conversely, such services furnished in connection with brokerage on other
accounts managed by Lord Abbett may be used in connection with their management
of the Fund, and not all of such services will necessarily be used by Lord
Abbett in connection with their advisory services to such other accounts. We
have been advised by Lord Abbett that research services received form brokers
cannot be allocated to any particular account, are not a substitute for Lord
Abbett's services but are supplemental to their own research effort and, when
utilized, and are subject to internal analysis before being incorporated by Lord
Abbett into their investment process. As a practical matter, it would not be
possible for Lord Abbett to generate all of the information presently provided
by brokers. While receipt of research services

18
<PAGE>

from brokerage firms has not reduced Lord Abbett's normal research activities,
the expenses of Lord Abbett could be materially increased if it attempted to
generate such additional information through its own staff and purchased such
equipment and software packages directly from the suppliers.

No commitments are made regarding the allocation of brokerage business to or
among brokers, and trades are executed only when they are dictated by investment
decisions of the Fund to purchase or sell portfolio securities.

If two or more broker-dealers are considered capable of offering the equivalent
likelihood of best execution, the broker-dealer who has sold our shares and/or
shares of other Lord Abbett-sponsored funds may be preferred.

If other clients of Lord Abbett buy or sell the same security at the same time
as we do, transactions will, to the extent practicable, be allocated among all
participating accounts in proportion to the amount of each order and will be
executed daily until filled so that each account shares the average price and
commission cost of each day. Other clients who direct that their brokerage
business be placed with specific brokers or who invest through wrap accounts
introduced to Lord Abbett by certain brokers may not participate with us in the
buying and selling of the same securities as described above. If these clients
wish to buy or sell the same security as we do, they may have their transactions
executed at times different from our transactions and thus may not receive the
same price or incur the same commission cost as we do.

We will not seek "reciprocal" dealer business (for the purpose of applying
commissions in whole or in part for our benefit or otherwise) from dealers as
consideration for the direction to them of portfolio business.

For the fiscal years ended October 31, 1998, 1997 and 1996, Affiliated Fund paid
total commissions to independent dealers of $80,000,000, $7,681,037 and
$5,897,259, respectively.

For the period December 13, 1995 (commencement of operations) to November 30,
1996, the year ended November 30, 1997, and the year ended November 30, 1998,
the Small-Cap Fund paid total commissions to independent broker-dealers of
$45,266, $1,812,425 and $______, respectively.

For the period December 13, 1996 (commencement of operations) through October
31, 1997 and the fiscal year ended October 31, 1998, International Fund paid
total commissions to independent broker-dealers of $108,270 and $_____,
respectively.

For the fiscal year ended October 31, 1998, 1997 and 1996, Growth Opportunities
Fund paid total commissions to independent broker-dealers of $_____, $______ and
$______, respectively.

5.
Purchases, Redemptions
and Shareholder Services

Information concerning how we value our shares for the purchase and redemption
of our shares is contained in the Prospectus under "Purchases" and
"Redemptions," respectively.

As disclosed in the Prospectus, we calculate our net asset value as of the close
of the New York Stock Exchange ("NYSE") on each day that the NYSE is open for
trading by dividing our total net assets by the number of shares outstanding at
the time of calculation. The NYSE is closed on Saturdays and Sundays and the
following holidays -- New Year's Day, Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.

Each Fund values its portfolio securities at market value as of the close of the
NYSE. Market value will be determined as follows: securities listed or admitted
to trading privileges on the New York or American Stock Exchange or on the
NASDAQ National Market System are valued at the last sales price, or, if there
is no sale on that day, at the mean between the last bid and asked prices, or,
in the case of bonds, in the over-the-counter market if, in the judgment of the
Fund's officers, that market more accurately reflects the market value of the
bonds. Over-the-counter securities not traded on the NASDAQ National Market
System are valued at the mean between the last bid and asked prices.

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<PAGE>

Securities for which market quotations are not available are valued at fair
market value under procedures approved by the Board of Directors (Trustees).

The net asset value per share for the Class Y shares will be determined by
taking Class Y shares net assets and dividing by shares outstanding. Our Class Y
shares will be offered at net asset value.

Each Fund has entered into a distribution agreement with Lord Abbett Distributor
LLC, a New York limited liability company ("Lord Abbett Distributor") and
subsidiary of Lord Abbett under which Lord Abbett Distributor is obligated to
use its best efforts to find purchasers for the shares of each Fund, and to make
reasonable efforts to sell Fund shares so long as, in Lord Abbett Distributor's
judgment, a substantial distribution can be obtained by reasonable efforts.

Class Y Share Exchanges. The Prospectus describes the Telephone Exchange
Privilege. You may exchange some or all of your Y shares for Y shares of any
Lord Abbett-sponsored funds currently offering Class Y shares to the public.
Currently those other funds consist of Lord Abbett Investment Trust - Core Fund,
Strategic Core Fund, Bond-Debenture Fund, Developing Growth Fund, and Mid-Cap
Value Fund.

Redemptions. A redemption order is in proper form when it contains all of the
information and documentation required by the order form or supplementally by
Lord Abbett Distributor or the Fund to carry out the order. The signature(s) and
any legal capacity of the signer(s) must be guaranteed by an eligible guarantor.
See each Prospectus for expedited redemption procedures.

The right to redeem and receive payment, as described in each Prospectus, may be
suspended if the NYSE is closed (except for weekends or customary holidays),
trading on the NYSE is restricted or the Securities and Exchange Commission
deems an emergency to exist.

Our Board of Directors (Trustees) may authorize redemption of all of the shares
in any account in which there are fewer than 25 shares (Affiliated Fund,
Small-Cap Fund, Growth Opportunities Fund, and High Yield Fund), and 60 shares
(International Fund). Before authorizing such redemption, the Board must
determine that it is in our economic best interest or necessary to reduce
disproportionately burdensome expenses in servicing shareholder accounts. At
least 6 month's prior written notice will be given before any such redemption,
during which time shareholders may avoid redemption by bringing their accounts
up to the minimum set by the Board.

6.
Taxes

The value of any shares redeemed by each Fund or repurchased or otherwise sold
may be more or less than your tax basis in the shares at the time the
redemption, repurchase or sale is made. Any gain or loss will generally be
taxable for federal income tax purposes. Any loss realized on the sale,
redemption or repurchase of a Fund's shares which you have held for six months
or less will be treated for tax purposes as a long-term capital loss to the
extent of any capital gains distributions which you received with respect to
such shares. Losses on the sale of stock or securities are not deductible if,
within a period beginning 30 days before the date of the sale and ending 30 days
after the date of the sale, the taxpayer acquires stock or securities that are
substantially identical.

Each Fund will be subject to a four-percent nondeductible excise tax on certain
amounts not distributed (and not treated as having been distributed) on a timely
basis in accordance with a calendar-year distribution requirement. Each Fund
intends to distribute to shareholders each year an amount adequate to avoid the
imposition of such excise tax.

The writing of call options and other investment techniques and practices which
each Fund may utilize, as described above under "Investment Objectives and
Policies," may create "straddles" for United States federal income tax purposes
and may affect the character and timing of the recognition of gains and losses
by a Fund. Such transactions may increase the amount of short-term capital gain
realized by each Fund, which is taxed as ordinary income when distributed to
shareholders. Limitations imposed by the Internal Revenue Code on regulated
investment companies may restrict each Fund's ability to engage in transactions
in options.

20
<PAGE>

Certain futures contracts and certain listed options held by a Fund will be
required to be "marked to market" for federal income tax purpose, i.e., treated
as having been sold at their fair market value on the last day of the Fund's
taxable year (referred to as Section 1256 Contracts). Sixty percent of any gain
or loss recognized on actual or deemed sales of such Section 1256 Contracts will
be treated as long-term capital gain or loss, and 40% of such gain or loss will
be treated as short-term capital gain or loss. Each Fund may be required to
defer the recognition of losses on securities and options and futures contracts
to the extent of any recognized gain on offsetting positions held by the Fund.

As described in the Prospectus under "How We Invest - Risk Factors," each Fund
may be subject to foreign withholding taxes which would reduce the yield on its
investments. Tax treaties between certain countries and the United States may
reduce or eliminate such taxes. It is expected that shareholders of each Fund
who are subject to United States federal income tax will not be entitled to
claim a federal income tax credit or deduction for foreign income taxes paid by
each Fund.

Gains and losses realized by each Fund on certain transactions, including sales
of foreign debt securities and certain transactions involving foreign currency,
will be treated as ordinary income or loss for federal income tax purposes to
the extent, if any, that such gains or losses are attributable to changes in
exchange rates for foreign currencies. Accordingly, distributions taxable as
ordinary income will include the net amount, if any, of such foreign exchange
gains and will be reduced by the net amount, if any, of such foreign exchange
losses.

If either Fund purchases shares in certain foreign investment entities, called
"passive foreign investment companies," it may be subject to United States
federal income tax on a portion of any "excess distribution" or gain from the
disposition of such shares, even if such income is distributed as a taxable
dividend by the Fund to its shareholders. Additional charges in the nature of
interest may be imposed on either the Fund or its shareholders in respect to
deferred taxes arising from such distributions or gains.

If a Fund were to invest in a passive foreign investment company with respect to
which a Fund elected to make a "qualified electing fund" election, in lieu of
the foregoing requirements, the Fund might be required to include in income each
year a portion of the ordinary earnings and net capital gains of the qualified
electing fund, even if such amount were not distributed to a Fund.

Dividends paid by a Fund will qualify for the dividends-received deduction for
corporations to the extent they are derived from dividends paid by domestic
corporations.

The foregoing discussion relates solely to U.S. federal income tax law as
applicable to United States persons (United States citizens or residents and
United States domestic corporations, partnerships, trusts and estates). Each
shareholder who is not a United States person should consult his tax advisor
regarding U.S. and foreign tax consequences of the ownership of shares of a
Fund, including a 30% (or lower treaty rate) United States withholding tax on
dividends representing ordinary income and net short-term capital gains, and the
applicability of United States gift and estate taxes to non-United States gift
and estate taxes to non-United States persons who own Fund shares.

7.
Past Performance

Each Fund computes the annual compounded rate of total return for Class Y shares
during specified periods that would equate the initial amount invested to the
ending redeemable value of such investment by adding one to the computed average
annual total return, raising the sum to a power equal to the number of years
covered by the computation and multiplying the result by one thousand dollars,
which represents a hypothetical initial investment. The calculation assumes
deduction of no sales charge from the initial amount invested and reinvestment
of all income dividends and capital gains distributions on the reinvestment
dates at prices calculated as stated in each Prospectus. The ending redeemable
value is determined by assuming a complete redemption at the end of the
period(s) covered by the annual total return computation.

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<PAGE>

In calculating total returns for Class Y shares no sales charge is deducted from
the initial investment and the return is shown at net asset value. Total returns
also assume that all dividends and capital gains distributions during the period
are reinvested at net asset value per share, and that the investment is redeemed
at the end of the period.

Class Y share performance. Using the computation method described above,
Affiliated Fund's total return for Class Y shares for the period from inception
(March 27, 1998) to October 31, 1998 was (4.77)%. For the period from inception
(December 30, 1997) to November 30, 1998, the total return for the Small-Cap
Fund was 6.50%. For the period from inception (December 30, 1997) to October 31,
1998, the total return for the International Fund was 10.02% (not annualized).

Our yield quotation for Class Y shares is based on a 30-day period ended on a
specified date, computed by dividing the net investment income per share earned
during the period by the net asset value per share of such class on the last day
of the period. This is determined by finding the following quotient: take the
dividends and interest earned during the period for the class minus its expenses
accrued for the period and divide by the product of (i) the average daily number
of Class shares outstanding during the period that were entitled to receive
dividends and (ii) the net asset value per share of such class on the last day
of the period. To this quotient add one. This sum is multiplied by itself five
times. Then one is subtracted from the product of this multiplication and the
remainder is multiplied by two. Yields for Class Y shares do not reflect the
deduction of any sales charge.

These figures represent past performance, and an investor should be aware that
the investment return and principal value of a Fund's investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. Therefore, there is no assurance that this performance will
be repeated in the future.

8.
Information About the Funds

Affiliated Fund is a Maryland Corporation formed in 1934. Small-Cap Fund and
Growth Opportunities Fund are series of Lord Abbett Research Fund, Inc., a
Maryland Corporation organized in 1992. The International Fund is a series of
Lord Abbett Securities Trust, a Delaware business trust organized in 1993. The
High Yield Fund is a series of Lord Abbett Investment Trust, a Delaware business
trust organized in 1993.

The directors, trustees and officers of Lord Abbett-sponsored mutual funds,
together with the partners and employees of Lord Abbett, are permitted to
purchase and sell securities for their personal investment accounts. In engaging
in personal securities transactions, however, such persons are subject to
requirements and restrictions contained in the Fund's Code of Ethics which
complies, in substance, with each of the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing. Among other things,
the Code requires that Lord Abbett partners and employees obtain advance
approval before buying or selling securities, submit confirmations and quarterly
transaction reports, and obtain approval before becoming a director of any
company; and it prohibits such persons from investing in a security 7 days
before or after any Lord Abbett-sponsored fund or Lord Abbett-managed account
considers a trade or trades in such security, prohibiting profiting on trades of
the same security within 60 days and trading on material and non-public
information. The Code imposes certain similar requirements and restrictions on
the independent directors and trustees of each Lord Abbett-sponsored mutual fund
to the extent contemplated by the recommendations of such Advisory Group.

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<PAGE>

9.
Financial Statements

The financial statements for the fiscal year ended October 31, 1998, and the
reports of Deloitte & Touche LLP, independent auditors, on such financial
statements contained in the 1998 Annual Report to Shareholders of Lord Abbett
Affiliated Fund, Inc. are incorporated herein by reference to such financial
statements and report in reliance upon the authority of Deloitte & Touche LLP as
experts in auditing and accounting.

The financial statements for the fiscal year ended November 30, 1998, and the
report thereon of Deloitte & Touche LLP, independent auditors, on such financial
statements contained in the 1998 Annual Report to Shareholders of the Lord
Abbett Research Fund, Inc. (which includes Small-Cap Fund and Growth
Opportunities Fund, formerly, Mid-Cap Fund), are incorporated herein by
reference to such financial statements and report in reliance upon the authority
of Deloitte & Touche LLP as experts in auditing and accounting.

The financial statements for the fiscal year ended October 31, 1998 and the
report of Deloitte & Touche LLP, independent auditors, on such financial
statements contained in the 1998 Annual Report to Shareholders of Lord Abbett
Securities Trust (which includes International Fund) are incorporated herein by
reference to such financial statements and report in reliance upon the authority
of Deloitte & Touche LLP as experts in auditing and accounting.

The financial statements for the fiscal year ended November 30, 1998 and the
report thereon of Deloitte & Touche LLP, independent auditors, on such financial
statements contained in the 1998 Annual Report to Shareholders of the Lord
Abbett Investment Trust (which includes High Yield Fund) are incorporated by
reference to such financial statements and report in reliance upon the authority
of Deloitte & Touche LLP as experts in auditing and accounting.

23
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PART C OTHER INFORMATION

Item 23 Exhibits

(a) Articles of Incorporation, Articles Supplementary.
Incorporated by reference to Post-Effective Amendment No. 73
to the Registration Statement on Form N-1A filed on March 2,
1998.
(b) By-Laws. Incorporated by reference to Post-Effective Amendment
No. 76 to the Registration Statement on Form N-1A filed on
December 18, 1998.
(c) Instruments Defining Rights of Security Holders. Incorporated
by reference.
(d) Investment Advisory Contracts, Management Agreement.
Incorporated by reference to Post-Effective Amendment No. 8 to
the Registration Statement on Form N-1A of Lord Abbett Equity
Fund, Inc. (File No. 811-6033).
(e) Underwriting Contracts. Incorporated by reference.
(f) Bonus or Profit Sharing Contracts. Incorporated by reference
to Post-Effective Amendment No. 6 to the Registration
Statement on Form N-1A of Lord Abbett Securities Trust (File
No. 811-7538).
(g) Custodian Agreements. Incorporated by reference.
(h) Other Material Contracts. Incorporated by reference.
(i) Legal Opinion. Incorporated by reference.
(j) Other Opinions. Consent of Independent Auditors.
(k) Omitted Financial Statements. Incorporated by reference.
(l) Initial Capital Agreements. Incorporated by reference.
(m) Rule 12b-1 Plan. Incorporated by reference to Post-Effective
Amendment No. 12 to the Registration Statement on Form N-1A of
Lord Abbett Research Fund, Inc. (File No. 811-6650).
(n) Financial Data Schedule. Incorporated by reference to
Post-Effective Amendment No. 74 to the Registration Statement
on Form N-1A filed on June 30, 1998.
(o) Rule 18f-3 Plan. Incorporated by reference to Post-Effective
Amendment No. 40 to the Registration Statement on Form N-1A of
Lord Abbett Bond-Debenture Fund, Inc. (File No. 811-2145).

Item 24 Persons Controlled by or Under Common Control with the Fund

None.

Item 25 Indemnification

Registrant is incorporated under the laws of the State of Maryland
and is subject to Section 2-418 of the Corporations and Associations
Article of the Annotated Code of the State of Maryland controlling
the indemnification of the directors and officers. Since Registrant
has its executive offices in the State of New York, and is qualified
as a foreign corporation doing business in such State, the persons
covered by the foregoing statute may also be entitled to and subject
to the limitations of the indemnification provisions of Section
721-726 of the New York Business Corporation Law.

The general effect of these statutes is to protect officers,
directors and employees of Registrant against legal liability and
expenses incurred by reason of their positions with the Registrant.
The statutes provide for indemnification for liability for
proceedings not brought on behalf of the corporation and for those
brought on behalf of the corporation, and in each case place
conditions under which indemnification will be permitted, including
requirements that the officer, director or employee acted in good
faith. Under certain conditions, payment of expenses in advance of
final disposition may be permitted. The By-laws of Registrant,
without limiting the authority of Registrant to indemnify any of its
officers, employees or agents to the extent consistent with
applicable law, make the indemnification of its directors mandatory
subject only to the conditions

1
<PAGE>

and limitations imposed by the above- mentioned Section 2-418 of
Maryland law and by the provisions of Section 17(h) of the
Investment Company Act of 1940 as interpreted and required to be
implemented by SEC Release No. IC-11330 of September 4, 1980.

In referring in its By-laws to, and making indemnification of
directors subject to the conditions and limitations of, both Section
2-418 of the Maryland law and Section 17(h) of the Investment
Company Act of 1940, Registrant intends that conditions and
limitations on the extent of the indemnification of directors
imposed by the provisions of either Section 2-418 or Section 17(h)
shall apply and that any inconsistency between the two will be
resolved by applying the provisions of said Section 17(h) if the
condition or limitation imposed by Section 17(h) is the more
stringent. In referring in its By-laws to SEC Release No. IC-11330
as the source for interpretation and implementation of said Section
17(h), Registrant understands that it would be required under its
By-laws to use reasonable and fair means in determining whether
indemnification of a director should be made and undertakes to use
either (1) a final decision on the merits by a court or other body
before whom the proceeding was brought that the person to be
indemnified ("indemnitee") was not liable to Registrant or to its
security holders by reason of willful malfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the
conduct of his office ("disabling conduct") or (2) in the absence of
such a decision, a reasonable determination, based upon a review of
the facts, that the indemnitee was not liable by reason of such
disabling conduct, by (a) the vote of a majority of a quorum of
directors who are neither "interested persons" (as defined in the
1940 Act) of Registrant nor parties to the proceeding, or (b) an
independent legal counsel in a written opinion. Also, Registrant
will make advances of attorneys' fees or other expenses incurred by
a director in his defense only if (in addition to his undertaking to
repay the advance if he is not ultimately entitled to
indemnification) (1) the indemnitee provides a security for his
undertaking, (2) Registrant shall be insured against losses arising
by reason of any lawful advances, or (3) a majority of a quorum of
the non-interested, non-party directors of Registrant, or an
independent legal counsel in a written opinion, shall determine,
based on a review of readily available facts, that there is reason
to believe that the indemnitee ultimately will be found entitled to
indemnification.

Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expense incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.

In addition, Registrant maintains a directors' and officers' errors
and omissions liability insurance policy protecting directors and
officers against liability for breach of duty, negligent act, error
or omission committed in their capacity as directors or officers.
The policy contains certain exclusions, among which is exclusion
from coverage for active or deliberate dishonest or fraudulent acts
and exclusion for fines or penalties imposed by law or other matters
deemed uninsurable.

2
<PAGE>

Item 26 Business and Other Connections of Investment Adviser

Lord, Abbett & Co. acts as investment adviser for twelve other
investment companies (of which it is principal underwriter for
thirteen) and as investment adviser to approximately 8,300 private
accounts as of September 30, 1998. Other than acting as directors
and/or officers of open-end investment companies managed by Lord,
Abbett & Co., none of Lord, Abbett & Co.'s partners has, in the past
two fiscal years, engaged in any other business, profession,
vocation or employment of a substantial nature for his own account
or in the capacity of director, officer, employee, or partner of any
entity.

Item 27 Principal Underwriters

(a) Lord Abbett Mid-Cap Value Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett Global Fund, Inc.
Lord Abbett Series Fund, Inc.
Lord Abbett U.S. Government Money Market Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Tax-Free Income Trust
Lord Abbett Securities Trust
Lord Abbett Investment Trust
Lord Abbett Research Fund, Inc.

Investment Advisor

American Skandia Trust (Lord Abbett Growth & Income Portfolio)

(b) The partners of Lord, Abbett & Co. are:

Name and Principal Positions and Offices
Business Address (1) with Registrant
-------------------- ---------------------

Robert S. Dow Chairman and President
Paul A. Hilstad Vice President & Secretary
Zane E. Brown Vice President
Daniel E. Carper Vice President
W. Thomas Hudson, Jr. Executive Vice President
Robert G. Morris Vice President
John J. Walsh Vice President

The other general partners of Lord Abbett & Co. who are neither
officers nor directors of the Registrant are Stephen I. Allen, John
E. Erard, Robert P. Fetch, Daria L. Foster, Robert I. Gerber,
Stephen J. McGruder, Michael McLaughlin, Robert J. Noelke, R. Mark
Pennington and Christopher Towle.

Each of the above has a principal business address:

767 Fifth Avenue, New York, NY 10153

Item 28 Location of Accounts and Records

Registrant maintains the records, required by Rules 31a - 1(a) and
(b), and 31a - 2(a) at its main office.

3
<PAGE>

Lord, Abbett & Co. maintains the records required by Rules 31a -
1(f) and 31a - 2(e) at its main office.

Certain records such as cancelled stock certificates and
correspondence may be physically maintained at the main office of
the Registrant's Transfer Agent, Custodian, or Shareholder Servicing
Agent within the requirements of Rule 31a-3.

Item 29 Management Services

None

Item 30 Undertakings

The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.

The registrant undertakes, if requested to do so by the holders of
at least 10% of the registrant's outstanding shares, to call a
meeting of shareholders for the purpose of voting upon the question
of removal of a director or directors and to assist in
communications with other shareholders as required by Section 16(c).

4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant has duly caused this Registration Statement
and/or any amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on the
30th day of December.

LORD ABBETT AFFILIATED FUND, INC.

By /s/Robert S. Dow
-------------------------------------
Robert S. Dow,
Chairman of the Board

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.

Chairman, President
/s/ Robert S. Dow and Director December 30, 1998
- ---------------------------- -------------------------- ---------------------
Robert S. Dow (Title) (Date)

/s/ E. Thayer Bigelow Director December 30, 1998
- ---------------------------- -------------------------- ---------------------
E. Thayer Bigelow (Title) (Date)

/s/ William H. T. Bush Director December 30, 1998
- ---------------------------- -------------------------- ---------------------
William H. T. Bush (Title) (Date)

/s/ Robert B. Calhoun Director December 30, 1998
- ---------------------------- -------------------------- ---------------------
Robert B. Calhoun (Title) (Date)

/s/ Stewart S. Dixon Director December 30, 1998
- ---------------------------- -------------------------- ---------------------
Stewart S. Dixon (Title) (Date)

/s/ John C. Jansing Director December 30, 1998
- ---------------------------- -------------------------- ---------------------
John C. Jansing (Title) (Date)

/s/ C. Alan MacDonald Director December 30, 1998
- ---------------------------- -------------------------- ---------------------
C. Alan MacDonald (Title) (Date)

/s/ Hansel B. Millican, Jr. Director December 30, 1998
- ---------------------------- -------------------------- ---------------------
Hansel B. Millican, Jr. (Title) (Date)

/s/ Thomas J. Neff Director December 30, 1998
- ---------------------------- -------------------------- ---------------------
Thomas J. Neff (Title) (Date)

Vice President and
/s/ Keith F. O'Connor Chief Financial Officer December 30, 1998
- ---------------------------- -------------------------- ---------------------
Keith F. O'Connor (Title) (Date)

CONSENT OF INDEPENDENT AUDITORS

Lord Abbett Affiliated Fund, Inc.:

We consent to the incorporation by reference in Post-Effective Amendment No. 77
to Registration Statement No. 2-10638 of our report dated December 11, 1998
appearing in the Annual Report to Shareholders for the year ended October 31,
1998, and to the references to us under the caption "Financial Highlights" in
the Prospectus and under the captions "Investment Advisory and Other Services"
and "Financial Statements" appearing in the Statement of Additional Information,
both of which are part of such Registration Statement.

DELOITTE & TOUCHE LLP
New York, New York
December 23, 1998

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